Indian hydropower investors face fresh trouble in Nepal

April 16th, 2009 - 6:23 pm ICT by IANS  

Kathmandu, April 16 (IANS) Two Indian companies that broke the ice in Nepal’s highly politicised hydropower sector last year by bagging contracts to develop two separate projects that together would generate over 700 MW are in hot water again following opposition by local groups.
In January 2008, India’s GMR Group was given the go-ahead by the coalition government of Nepal to develop the 300 MW Upper Karnali project. However, the Bangalore-headquartered company at first found itself dogged by law suits and then security threats by local groups enjoying political patronage which hampered work.

Now, public sector undertaking Satluj Jal Vidyut Nigam, which won the contract for the 402 MW Arun III project, is being opposed by local indigenous communities.

The Arun Valley Adivasi Indigeous People’s Rights Forum, a newly formed body of protesters, has begun a campaign in Kathmandu, alleging that the project remains silent on the future of the locals who would become displaced.

The forum is also expressing reservations about the fate of the rare flora and fauna of northern Sankhuwasabha district near the border with Tibet, due to the construction of a dam, an approach road and two tunnels needed for the project.

It has begun petitioning the ministries involved, including the water resources ministry, finance ministry and local development ministry.

If the current Maoist-led government does not heed their concerns, the protesters have threatened to stop the project.

Though Nepal, endowed with several Himalayan rivers, has the economic feasibility of generating 43,000 MW of power, it has been able to tap only about one percent of it due to lack of funds, instability and political interference.

At present, the country is passing through its worse power crisis ever, reeling under a nearly 18-hour power outage daily.

While local companies lack the financial resources to develop new big power projects, foreign companies given the nod find themselves at the receiving end of local protesters.

Nepal’s oldest and biggest power project West Seti, which is being developed by a consortium led by Australian West Seti Hydro Ltd, is expected to generate 750 MW.

But though the Australian company signed an agreement with the government of Nepal in 1997, it is yet to get off the ground.

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