GMR requests investment board to extend Upper Karnali's deadline for second time

Published On: September 5, 2017 04:56 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Sept 5: The Investment Board has received an application from the promoter of Upper Karnali Hydropower Project with the call to extend the construction tenure. 

Indian promoter company Grandhi Mallikarjuna Rao (GMR), known as GMR Group which holds the license for the project construction had approached the Board with a request to extend the construction deadline, citing its inability to mobilize the investment. 

The GMR was awarded the contract of constructing the 900- Megawatt Project located on the Karnali River in Surkhet, Dailekh and Achham districts. The contract was awarded through an international competitive bidding process in 2008. 

The company has been unable to manage funds for the implementation of project when three years are about to complete since the signing of the Project Development Agreement (PDA). 

Only 25 days are left to end the tenure of project construction. According to Board Executive Officer Mahaprasad Adhikari, the GMR has applied for the extension of tenure and discussions are on about it. 

The government last fiscal extended the project tenure by a year in response to the company's call for so, citing the failure to garner the funds. 

It has been stating that it has already signed the power trade agreement with Bangladesh (400 MW) and the Haryana State, India (200 MW). 

However, the company has not yet submitted the PTA and Memorandum of Understandings reached with banks and financial organisations for loan investment in the project to the Board. 
As per the PDA, the company had to gather required investment within the two years of the signing of the agreement. But the one-year extended tenure is ending soon. 

The project representatives had also held discussions with Energy Minister Mahendra Bahadur Shahi on September 1 on this matter. The project representatives had met with the Energy Minister after he gave a public statement indicating to scrap the project license for failure to carry out the works on the stipulated time. 

The project representatives had, at a programme organized here some time back, stated that necessary preparations were being made to mobilize the required financial resources. A bank has been set up at Dab in Dailekh district for the distribution of compensation to the affected locals. Compensation needs to be provided to a total 426 households as per the rehabilitation and resettlement action plan. It is decided to provide Rs 895 thousand as compensation for per ropani of private land. 

The government and the Indian company GMR signed a MoU on September 19, 2014 for the construction of the 900- megawatt hydroelectricity project. The Board has eased the process for the use of forest area for the project. The Ministry of Forests and Soil Conservation has made the required decision to this effect. 

The Ministry has made a decision to provide 252.72 hectares land in Dailekh and Achham for the construction of the project's tunnel, reservoir and power house. Sattala, Singaudi, Layati Bindrasaini, Nepa, Naule Katuwal and Khadabada in Dailekh district; Pokharikanda, Chhapre and Salkot in Surkhet district; and Bhairabsthan, Rahaf and Raniban in Achham district are directly affected areas. 

A 150 feet high dam would be constructed at Dab of Dailekh and the water from it would be channelizedthrough a 2.5 kilometres tunnel and used to run the turbine of thepowerhouse to be constructed at Balde of Achham for power production. 

The government gets 27 per cent share of the project and 12 per cent power for free. The estimated cost of the project is Rs 116 billion. As per the agreement the project would be handed over to the government after 25 years. RSS 

Leave A Comment