Thaindian News

Kathmandu, June 25 (IANS) With the former Maoist guerrillas warning Nepal Prime Minister Jhala Nath Khanal that they would oppose deployment of the army to provide security to beleaguered Indian company GMR, the rattled government has decided to drop the move despite a cabinet decision.

Home Minister Krishna Bahadur Mahara had himself announced that the army would be deployed to protect the GMR-led consortium’s 900 MW hydropower project in the remote west. But the Maoist leader later retreated from the position, saying armed police would be dispatched instead.

“We will think of the army if there is still a security lapse,” Mahara said.

This was a volte face on the cabinet decision last week that the army would be deployed to guard the office and site camp of GMR’s Upper Karnali hydropower project in Dailekh district.

The announcement was made after a mob burnt down the office and camps in May and the police failed to arrest a single perpetrator.

The cabinet decision was strongly opposed by the Maoists, the dominant partner in Khanal’s alliance government, who warned they would spearhead a protest from the streets, parliament as well as within the government.

On Wednesday, 17 Maoist organisations met Khanal and submitted a memorandum, warning that deployment of the army would go against the peace accord they signed five years ago as well as the interim constitution that says army deployment can occur only during a state of emergency.

The organisations also asked Khanal to scrap the licence given to GMR and other Indian companies that plan to export the hydropower they generate.

The list includes Indian public sector undertaking Satluj Jal Vidyut Nigam, which is developing the 400 MW Arun III project that can be upgraded to produce 800 MW.

Since the attack last month, all work at the Upper Karnali site has come to a halt. The delay in providing security is certain to affect the 2016 completion date and escalate project costs.

Khanal, who came to power on Maoist support and is heavily dependent on them for survival, is unlikely to antagonise them, which bodes ill for all Indian investments in Nepal that are being targeted by the former rebels.

The Maoists are demanding that Nepal hold majority stakes in all major hydropower projects with foreign investors allowed to invest but barred from having any control over them.

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