"Sutlej asked us to build access road to the project site and increase the concession period--the period for which a developer retains project ownership--in the meeting," a government official who took part in the discussion told Republica.[break]
The government can give a maximum of 35 years of concession period to a developer as per the existing Build-Own-Operate-Transfer (BOOT) Act. However, the government has given only 25 years of concession period to Sutlej.
The government, which is responsible to build access road to the project site, has just completed opening tracks.
According to the official, the meeting between Sutlej--state owned Indian power developer--and the Nepal Investment Board (NIB) mainly focused on laws and their consistency. "Sutlej has asked Nepal government whether it can import required construction materials from India," the official said on condition of anonymity.
A team of officials from the New Delhi based head office of Sutlej, led by R K Agrawal, managing director of the Business Development and Management Service, Sutlej, visited Nepal aiming to finalize the deal towards inking on PDA.
"The PDA with Sutlej for Arun III will be completed by next two months if the negotiations continue on the same pace," the official further said.
Additionally, Sutlej has sought strong commitment from the government on different policies such as income tax, excise duty on the export of produced power, value added tax and allocation of amount for forestry development from the total income of the project.
"The officials from Sutlej enquired whether the government can ensure consistency of the existing income tax policy during the entire project period," said the official close to the developments.
According to the official, Sutlej officials made it clear that they wouldn´t be able to spend five percent of their total income on the forestry sector. The government had introduced a law recently that requiring hydropower producers to spend five percent of their total income on the forestry development.
"That´s not practical for us," the official quoted Sutlej team.
Arun III is a run-of-the-river project based in Sankhuwasabha district.
Sutlej was selected to prepare a detailed project report (DPR) through a global bidding in 2008. As of now, Sutlej is on the verge of completing survey license.
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