KATHMANDU, Sept 25: The Detailed Project Report (DPR) and other key documents for development of Budhigandaki Hydropower Project will be prepared by the end of October, but the government has not yet started key preparations, including arranging financing to develop the 1200-megawatt project.
French consultant Tractebel Engineering has been given until October to submit DPR and bid documents, among others. Officials of Budhigandaki Hydroelectric Development Committee (BHDC) say the consultant will complete its work within the given timeframe.BHDC has given Tractebel additional three months after its work was affected by the earthquake of April 25.
The government hasn't even started discussion to arranging financing to develop the project which is estimated to cost of Rs 250 billion. The project cost is about seven times higher than Upper Tamakoshi Hydropower Project (456 MW) which is estimated to cost Rs 35 billion.
Dambar Nepali, the architect of Chilime Hydropower model, who is also the member of BHDC, admitted that they have not been able to start discussion to mobilize financial resources to develop the project. He, however, is hopeful that the project can be developed by mobilizing internal resources.
Two years ago, Nepali had tried to seek commitments from different institutional lenders like Employment Provident Fund, Citizens Investment Trust, Nepal Telecom and Nepal Army Welfare Fund, among others, to raise Rs 150 billion. "We need government guarantee to develop this mega project. But we have been facing problem to seek commitments due to slow working style of government and the red tape," Nepali, who is also a retired staff of Nepal Electricity Authority (NEA), told Republica.
As the project is near the load center of Kathmandu, the government is planning to develop the reservoir project on its own by taking loans from foreign lenders. It started allocating budget for relocation of project-affected households from last year. Around 40,000 people will be affected by the project.
BHDC has started collecting details of land parcels and households in coordination with the Department of Land Reforms and Department of Survey. It will take around three months to complete the task.
Total cost for resettlement and compensation payment to land and house owners has been estimated at around Rs 50 billion. "We will also float the idea of distributing half of the amount to land and house owners and converting the remaining amount as equity investment in the project itself," Nepali said, adding, "We are also encouraging migrant workers to invest in the project."
In this fiscal year, the government has allocated Rs 2.9 billion to distribute compensation to project-affected locals. Around 133 ropani required for construction of powerhouse has already been acquired.
Officials had even discussed the idea of injecting Indian Line of Credit of Rs 100 billion to finance the project. But the idea has been dropped after officials reached to a conclusion that they cannot follow the terms and conditions that come attached with the Indian Line of Credit.
Though the French consultant is about to complete its work, Minister Radha Gyawali has not taken the project seriously. Instead of encouraging officials for smooth development of the project, she is interfering with the management. She recently changed the formation and relieved incumbent Chairman Laxmi Prasad Devkota of his executive power. Gyawali has appointed a new executive director at BHDC.
BHDC has also proposed to the energy ministry to form a panel of experts to the Ministry of Energy for examination of the DPR, EIA, and procurement documents. But the ministry has not accepted the proposal.
"We have proposed to the government to form a team of international consultants to asses DPR and bid documents, as we don't have the experience to handle the project of this scale," Devkota told Republica.
However, Sanjay Sharma, spokesperson of energy ministry, said that they would discuss the matter after receiving DPR and other documents.
Baikunth Aryal, joint secretary of Ministry of Finance, said it is time discussions to find sources to finance the project were started. "It will be expedited after the consultant submits DPR and other documents," he added.
Meanwhile, Khadga Bahadur Bisht, president of Independent Power Producers' Association Nepal said the project should be developed in Public Private Partnership (PPP) with government making equity investment.
The country has not yet seen hydropower project developed in PPP model.
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