Law Ministry opposes West Seti renewal, advises against new clauses
BIMAL GAUTAM AND AKANSHYA SHAH
KATHMANDU, Nov 29: Ministry of Law and Justice has raised strong objection to a proposal to renew the agreement on the 750 MW West Seti Hydro Project for a 10th time. Minister for Law and Justice Prem Bahadur Singh has objected to the proposal, saying that it undermines the “sovereignty and integrity” of Nepal.
Expressing serious concern over controversial provisions in the West Seti hydropower agreement, Minister Singh has urged the Ministry of Energy not to renew the agreement with the project without first removing such debatable provisions.
The Energy Ministry had recently forwarded the proposal to the Finance and Law Ministries, seeking their advice over the matter. In his reply, the law minister withheld approval and recommended big changes to some clauses.
“If the agreement is renewed for the 10th time without incorporating our ministry´s recommendations, I will raise the issue seriously in the cabinet,” Singh told myrepublica.com.
The law minister has recommended removing one “controversial clause” which says that the Nepal government will be liable for all damage at the project.
“The Nepal government cannot be responsible for all the damage; it can be responsible only for some damage as prescribed by Nepali law and regulations and thus it [clause] is objectionable,” he said.
According to him, the dispute settlement clause is also highly objectionable. The agreement has a provision for settling all disputes as per the laws of the United Kingdom. “How can foreign law be applicable for settling disputes in our country? Minister Singh questioned, adding, “This is a serious challenge to our sovereignty and integrity. No one can force us to abide by foreign law. And so I recommended that this clause be removed.”
Minister Singh also said that some provisions are contrary to the Electricity Act and Regulations.
The project has likewise sought the right to issue debentures. Minister Singh has suggested that the government remove that clause too. “No private company has the right to issue debentures. Only Nepal Rastra Bank has this right,” he said.
Asked to comment, Energy Minister Dr Prakash Sharan Mahat said that the ministry is yet to study the recommendations of the Law Ministry. “The Finance Ministry has given a positive signal. We are yet to study the recommendations of the law minister,” Mahat said.
Mahat argued that since French and British models are increasingly in use in determining international law governing foreign investment, the inclusion of UK law should not be objectionable. As for the risk and damage, he said, “We have to bear some damage but not all.”
Hydro experts, meanwhile, have said that the compensation mechanism is highly discriminatory. They argue that it is now Nepal that should seek compensation as the delay has been caused from the contractor´s side. As per the original agreement, the contracting company was to complete the project in seven years, but it has not been completed even after 12 years.
The West Seti agreement is also under investigation by the parliamentary Public Accounts Committee.
20 MW via Tanakpur
The Indian government has agreed to export 20 MW of additional power to Nepal via Tanakpur point. The agreement to this effect was reached in New Delhi on Friday.
The negotiating team of Nepal Electricity Authority (NEA) led by Managing Director Dr Jivendra Jha returned to Kathmandu on Saturday.
According to NEA sources, the power is to be imported at IRs 6 per unit from India. Nepal government has also proposed importing 30 MW from Gandak and another 30 MW from Duhabi-Kataiya route to meet the power crisis this winter.
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Law Ministry Opposes West Seti Renewal, Advises Against New Clauses
Interesting argument about French and British laws! If those laws were so perfect why not incorporate them into our Nepali investment laws, so all foreign investments would feel equally secured.
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Rolpali Kanchhi
I salute you law minister. Hope you do not capitulate in front of pressure from the "embassy" or the energy ministry.
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