India’s GMR Group dragged to court over Nepal project

March 8th, 2008 - 12:59 pm ICT by admin  

By Sudeshna Sarkar
Kathmandu, March 8 (IANS) Less than two months after it became the first Indian private company to win a power project in Nepal, the GMR Group finds itself dragged into a public interest suit in the Himalayan kingdom. GMR, that pipped 13 other contenders, including a flurry of Indian companies, to wrest the contract for the 300 MW Upper Karnali hydel project in January, has been taken to court by two Nepali citizens, who allege that hydropower being a matter of national interest, the contract has to be approved by two-third of Nepal’s interim parliament and not just the cabinet.

On Friday, Nepal’s Chief Justice Kedar Prasad Giri began hearing the case along with judge Ram Prasad Shah.

The petitioners are calling the MoU signed between GMR and Nepal’s water resources ministry unconstitutional and are urging it to be scrapped.

The hearing will continue Wednesday when the Indian company and Nepal government will defend the deal.

On the heels of the GMR lawsuit, protests have also started erupting over a second project awarded to another Indian company.

The Indian PSU Sutlej Jal Vidyut Nigam last month won the contract to develop the 402 Arun III project.

Just as it had happened with the GMR deal, ethnic groups have begun staging public rallies to protest against the contract.

A third hydropower project, West Seti, which was awarded to an Australian company, is also enmeshed in legal tape.

Hydropower is an explosive political issue in Nepal with many regarding Nepal’s bigger neighbour India as trying to exploit the smaller country’s water resources.

The Maoists, who are a major force in Nepal’s ruling coalition, have also expressed opposition to the signing of any deal of national importance ahead of the critical April 10 election.

On Friday, the former rebels unveiled their election manifesto, which visualises a federal republic in future with 11 autonomous states and two sub-states.

The communities in the areas where the potential hydropower projects are located are also opposing the contracts, demanding that the local community should have a say as well since the government has promised them autonomy.

The deals are said to have been pushed by Prime Minister Girija Prasad Koirala himself at the behest of the Indian government.

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