Hand over west seti project to Investment Board: Probe
KATHMANDU, March 29: The sub-committee formed by the Committee on Natural Resources and Means of parliament to probe the signing of Memorandum of Understanding (MoU) with China Three Gorges Corporation (CTGC) for West Seti Project has directed the government to hand over the project to the Investment Board.
Pointing at several irregularities in the MoU, the sub-committee, in its report submitted to the parliamentary committee, has also suggested that the Ministry of Energy (MoE) formulate standard formats for MoU and Power Development Aggreement (PDA) and incorporate them in regulations to ensure that such gaffes are not repeated in future.
"We have also directed that it should be developed as a multipurpose project, with resettlement of displaced locals by building new satellite cities, consumption of 150 MW out of the total electricity generated in the Far West region and replacement of the current 75-25 percent equity model with 51-49 percent," member of the sub-committee lawmaker Gagan Thapa revealed.
The sub-committee has also directed that the Power Purchase Agreement be done in Nepali currency if possible and that the risk of exchange-rate fluctuation be shared if it is done in foreign currency. It has also directed the MoE to submit a timeline of the expected energy and transmission line scenario till 2020 to the committee.
The probe committee found, lawmaker Thapa stated, that the MoE signed the agreement with CTGC despite sufficient grounds suggesting that Nepal could build the project on her own. "It could have gone for free-competition if Nepal could not build it on her own, or to the one that had offered the best deal of the three Chinese firms that had expressed interest," Thapa said.
Joint Secretary Arjun Karki, who had initiated the file of CTGC, was asked by the Minister of State for Energy Suryaman Dong to negotiate with CTGC and come up with a technical proposal. But he went beyond the mandate and signed the MoU, the probe committee deemed. The sub-committee also asked the MoE to prepare the technical and financial paper on the project. "The lack of transparency and irregularities in signing the MoU has drawn our serious attention and we have recommended action against those who went beyond their mandate," Thapa added.
The sub-committee deemed that all the procedural flaws involved had been on the part of MoE, and Thapa reasoned that the probe committee decided to give a go-ahead considering Nepal´s dire need for a big reservoir project. "We directed the government to hand it over to the Investment Board as it is automatically attracted to the projects above 500 MW. The board had written to us that it would take up the project as high priority if it is brought under the board´s jurisdiction after requisite amendment and revision," Thapa explained.
The Committee on Natural Resources and Means had formed the probe committee on March 9 after a majority of the lawmakers who attended its meeting that day questioned the intention behind signing the MoU with CTGC on Feb 29 without competitive bidding after revoking the MOE´s working procedure of opting for competitive bidding on the same day.
The deadline of the probe committee was extended till May 28 last week after the committee deemed that it required more time for investigations.