KATHMANDU, Nov 4: A committee formed to build the modality to develop West Seti Hydro Project after China Three Gorges Corporation (CTGC) backtracked from the project is yet to come up with an appropriate model of developing the project.

The committee that was formed by the Investment Board Nepal (IBN) one and a half month ago is still clueless about a possible model that Nepal can embrace to build the much-hyped project. 

Minister for Energy, Water Resources and Irrigation Barshaman Pun, Minister for Finance Yuba Raj Khatiwada and Investment Board’s CEO Maha Prasad Adhikari are members of the committee. 

“The committee has met three times. But it is yet to reach any conclusion,” said Uttam Bhakta Wagle, joint secretary at the board.

Located in Doti, Dadeldhura, Bajhang, and Baitadi districts, West Seti is a storage project with 750 MW capacity.

Earlier, the Investment Board had decided not to award the project to the CTGC after it reportedly put forth one after another condition to build the project during a two-day dialogue between a high-level delegation of the Chinese company and senior officials of the board. 

Following the decision, the project’s modality and fate has become uncertain. 

At a time when negotiations with the Chinese company were underway, the government through the budget speech of the current fiscal year had announced that the project will be constructed through domestic resources. This announcement caused more uncertainty over the modality of the project. 

Observers say that such unnecessary conditions put forth by Chinese company were guided by their intention to quit the project. 

Among others, the Chinese company representatives are reportedly against an ‘unfeasible’ power purchase policy and possible complications in resettlement and rehabilitation at the project site.

Following an in-depth study of the project development process to address the concerns and demands of Three Gorges, Nepal government had agreed to extend the US dollar PPA (power purchase agreement) rates for two more years to 12 years and also revise the project capacity down to 620 MW from the original 750 MW.

After more than six years of negotiations with the Chinese company broke down in August end, the board on September 18 had formed the high-level committee to prepare the modality for the development of the project. The committee’s failure to make any headway is likely to further delay the project that is expected to be a game-changer for the country’s economy. 

The Chinese company had bagged the project in February 2012 through direct negotiations with the government. In contrast to other hydropower projects under the mandate of IBN, this project focuses on domestic consumption.

 
• Seti
 
• Nepal
 
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