Attack on GMR to cost Nepal dear

May 27th, 2011 - 3:13 pm ICT by IANS  

Kathmandu, May 27 (IANS) The attack on Indian infrastructure and energy major GMR’s power project in western Nepal by Maoists Sunday is going to cost the Himalayan republic dear with the 900 MW hydropower project now unlikely to meet its 2016 completion date.

Five days after the GMR Energy-led consortium’s Upper Karnali Hydropower Project’s camp site in remote Dailekh district was burnt down, police failed to make any arrests while the company pulled out its employees from the charred site due to fear for their security, bringing all work to a grinding halt.

The act of arson and vandalisation Sunday destroyed all the three pre-fabricated buildings in Dailekh, including the GMR site office with its computers and documents.

The nearly $469 million project’s environmental impact assessment was on the verge of completion when the attack occurred and the public hearings on the report were to have been held in June.

But now with the data lost, the work will be delayed. More than the lost data, the fear of further attacks and the pulling out of all personnel will cause the delay to go up further, causing an escalation in costs as well.

Soon after the attack, the second in two months, GMR’s director G. Subba Rao and Harvinder Manocha, GMR Energy’s associate vice-president as well as country director for Nepal, rushed to Nepal to assess the situation and hold talks with Nepal’s Energy Minister Gokarna Bista and all lawmakers from the three districts spanned by the project - Dailekh, Accham and Surkhet.

The officials have been pushing for concrete action against the culprits and a real assurance of security.

Though the Maoist leaders denied having any hand in the arson and promised to take action against any cadre, if found guilty, the assurance has not been bought by GMR or the Indian officials in Nepal.

Besides Dailekh, Accham and Surkhet being Maoist strongholds, GMR’s projects in Nepal, including the 600 MW Upper Marsyangdi, have been regularly threatened by the Maoists with their top leaders demanding that their licences be scrapped.

The attack on GMR comes even as other major Indian investments in Nepal, like the Manipal Group, and United Telecom Ltd, have been regularly facing labour trouble, harassment and discrimination by the government.

The Independent Power Producers’ Association of Nepal warned the government in a press statement that such attacks would demolish investors’ confidence in Nepal.

Besides the Indian investor, Nepal itself stands to lose considerably if the project is delayed or at the worst, scrapped.

While a consortium of GMR Energy Limited, GMR Infrastructure Limited and Italian-Thai Development Project is developing the Upper Karnali, Nepal Electricity Authority gets 27 percent free equity and Nepal gets 12 percent of the power generated free.

Facing an 18-20 hour daily power cut during the dry winter and summer seasons, Nepal has been banking on the Upper Karnali project to ease the power crisis within the next five years. Any delay would add to the power woes of the Himalayan republic.

Also, the Upper Karnali attack, unless its perpetrators are brought to justice, will sour relations between Nepal and India as the security of Indians and Indian investments was among Indian External Affairs Minister S.M. Krishna’s prime concerns during his visit to Nepal last month.

(Sudeshna Sarkar can be contacted at sudeshna.s@ians.in)

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