Developers to be allowed to build infra at project sites on their own
September 20, 2018 07:51 AM
Government to share cost of such investments
KATHMANDU, Sept 20: Delay in building infrastructure like access road and electricity supply, among others, have affected many development projects. One example is Hongshi Shivam Cement Pvt Ltd in Nawalparasi.
The joint venture company between Nepali and Chinese investors has not been able to run to its full capacity of 6,000 tons of cement per day -- the largest capacity in the country so far -- as the company has no grid electricity supply. As a result, it has been forced to use diesel generators to run its plant. Also, it lacks an all-weather access road to the plant.
Arun III Hydropower Project in Sankhuwasabha district is also facing a similar problem. Though construction works began two years ago, the project still lacks all-weather access road in some sections as the government is yet to acquire land for the access road.
To address these issues, the Investment Board Nepal (IBN) has decided to prepare a working procedure that allows investors or developers to arrange required utilities or infrastructures on their own. Cost of such works will be borne by the government and these works may also be carried out in public private partnership (PPP) model, officials of IBN say.
The meeting of the board of directors of IBN held in Kathmandu on Tuesday has given IBN the go-ahead to prepare the working procedure and table it in the cabinet for approval, IBN said in a statement issued on Tuesday.
The essential infrastructure required includes access road, bridges, communication infrastructure, and transmission line, among others.
IBN is a government agency formed to create an investment-friendly environment in the country to bring both domestic and foreign direct investment. It is also a nodal agency for investment promotion and facilitation. But the agency has often been criticized for not living up to its commitments to investors in several projects.
Similarly, the meeting also accepted a proposal of China Three Gorges International Corporation to leave West Seti Hydropower Project and also decided to look for new modality to develop the project. The Chinese company told IBN that it was walking away from the project after finding in ‘financially and technically’ unviable.
According to an IBN official, a ministerial-level committee comprising of Minister for Energy, Water Resources and Irrigation, Minister for Finance, and CEO of IBN will work out project development modality for the 750 MW project.
The project, which was awarded to an Australian company in the mid-1990s, has become an unachievable dream for Nepal as the Chinese company chose to walk away after sitting on the project for nearly six years.
China Three Gorges President Zhao Jianqiang was in Kathmandu in August last week to hold the discussion with IBN official on project development. During the discussion, he told IBN officials that the project is not viable to reap 17 percent return on investments.
IBN also has approved a proposal to bring foreign investment to build hotels in Dahachowk of Kathmandu, Bhaktapur, and Pokhara. Japan Club International Pvt Ltd, which is registered in Office of the Company Registrar, has received permission to bring US$ 139.8 million worth of foreign investment.
The board of directors has asked IBN to table proposals for conducting a feasibility study on of solar energy, river port and magnetic energy in the next cabinet meeting.