TBI Holdings gets license, but government may get nothing

Published On: October 28, 2017 08:15 AM NPT By: Rudra Pangeni  | @rudrapang

KATHMANDU, Oct 27: Several domestic and international firms were eying to build Tamakoshi-3, a hydroelectricity project of 650 MW capacity. They were hopeful for a call for competitive bidding, but a sudden move by Energy Secretary Anup Kumar Upadhyaya to award the project’s license to TBI Holdings left them utterly disappointed. 

But it will be the government that will lose the most in lack of a competitive international bidding.
In all possibility, the project will get delayed and also there is no guarantee that the license-holder will build the project on time. 

The TBI Holdings is promoted by Bhaban Bhatta, who was recently elected as the chairman of Non-Resident Nepali Association.

Upadhyaya, who awarded the license on the first-come-first-serve basis last week, remained silent for months on opinion sought by Investment Board Nepal (IBN) on the proposed modality of developing the project, said IBN officials. In January, IBN’s meeting led by former Prime Minister Pushpa Kamal Dahal had instructed IBN secretariat to do the needful for fixing development modality in coordination with Ministry of Energy (MoE). The IBN is the authority to handle hydropower projects above 500 MW. The peaking run-of-river project can generate 2340 GWh energy annually. 

 “We had forwarded the proposal of calling international bidding as per IBN board decision, but the project has now been given to another developer. We don’t know what happens next,” said Maha Prasad Adhikari, IBN’s chief executive officer.  

The project is very important for the country to meet its power need, as also laid out in the government’s 10-year plan of ending power crisis. 

In February, the IBN had forwarded the proposal of international bidding to MoE seeking its opinion but the latter remained silent on the matter. The sudden decision to award the project has raised questions over the motive behind. 

Unlike in other competitive bidding of Arun III and Upper Karnali, the government will probably get nothing from this project of peaking run-of-river modality. Officials have said that the project has now become lucrative, following the implementation of separate price rates for peaking run-of-river projects. 

Arun III has agreed to give 21.9 percent free energy to the government, while Upper Karnali is giving 12 percent energy and 27 percent equity shares free of cost.

“The abrupt decision of awarding study license of the project which is in a stage of ready-to-build throws the project into uncertainty because the project now enters into another study,” said a high-level IBN official seeking anonymity. 

“The issue hereafter is not only of competitive bidding, but whether the holding is a genuine one and whether it has experience in building plants,” said Shailendra Guragain, president of Independent Power Producers’ Association, Nepal. Guragain also said Nepali developers were also interested in building the project. 

The project was abandoned by the Norwegian company Statkraft in 2016 saying that there was no market for power produced from the project.

IBN’s board meeting held on January 8 had decided to take the project forward by fixing development modality, conducting environmental study, completing acquisition of private and forest lands required for the project, and building access road, among other tasks. These preparatory works are underway at IBN currently. 

Several letters of intents to build the project, including from Chinese and Japanese firms, were awaiting IBN’s call of competitive bidding. They are now dismayed by the secret decision to award the project’s license to a single party without a public notice. 

This is a sure move to humiliate interested developers because the IBN was also in talks with interested parties including a Japanese company, according to IBN officials.

Leave A Comment