Stuck in India, GMR Energy forays into Nepal

September 26th, 2008 - 3:38 pm ICT by IANS  

Kathmandu, Sep 26 (IANS) With limited opportunities in its home country, Indian infrastructure major GMR Group is trying to widen its portfolio through four hydropower projects in Nepal, a top company official said.”We are already developing hydropower projects worth 800 MW in India’s Uttarakhand, Himachal Pradesh and Arunachal Pradesh,” group company GMR Energy’s associate vice-president Harvinder Manocha told IANS.

“We wanted to increase our portfolio but all the large projects in India have already been allocated to public sector units and only B category projects are left for the private sector.”

“Jammu and Kashmir alone has possibilities but because of the security situation, it is under watch. So we decided to try Bhutan and Nepal,” he said.

In 2007, GMR Group became the first private Indian company to establish a presence in Nepal’s hydropower sector when it bought a 80 percent stake in Nepali hydropower company Himtal Hydropower.

Himtal will now be developing the 250 MW Upper Myarsangdi project in the Himalayan republic.

Then, in May 2008, a consortium led by GMR Energy got a licence for developing the 302 MW Upper Karnali hydel project against stiff competition from a dozen other mostly Indian companies and rigorous evaluation procedures.

In addition, GMR Energy has also applied for licences to develop two more projects - the 184 MW Karnali-Gutu and the 500 MW Tila projects. Both are located in the Karnali basin and will enable the group to realise greater synergy.

However, after signing a memorandum of understanding with the Nepal government for the Upper Karnali project, the group came up against a public interest litigation (PIL) filed by a local non-governmental organisation.

The PIL sought a stay on the project and contended that the licence must be approved by two-thirds of the Nepali parliament as hydropower is a national resource.

“The court’s refusal to grant a stay was a very positive move and the recent West Seti verdict is also heartening,” Manocha said.

The 750 MW West Seti project is being developed by a consortium led by the Australian company Snowy Mountain Engineering Corporation and includes India’s Infrastructure Leasing and Finance Company.

Blocked for years due to the political turmoil in Nepal, the company finally announced progress this year but then came across a PIL similar to the one against GMR’s Upper Karnali project.

In a landmark judgement for hydropower companies, the Supreme Court recently ruled that a two-thirds vote in parliament was not needed.

“Our PIL verdict will come after the West Seti judgement so we are hopeful of a positive outcome,” Manocha said.

“The legal structure should be changed if the new Maoist-led Nepali government is serious about its plans to develop 10,000 MW of hydropower in the next decade,” he said.

“Allowing all PILs to get registered in the Supreme Court should change,” he said.

He also felt that the present licensing policy of making companies apply once for surveying, to be completed in 30 months, and then again for power generation should also be changed as it leads to delays and uncertainty.

The Upper Karnali detailed project report and environment impact assessment report will be completed only after the topographical survey that will begin after the monsoon. The project will take five years to complete.

The Upper Myarsangdi project will take about five and a half years to complete after the DPR is prepared by 2009.

The GMR Group also has other long-term infrastructure plans in mind for Nepal but any serious thought about them will come only after Upper Karnali takes off.

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