POST REPORT KATHMANDU, Feb 5 - India's Sutlej Jal Vidyut Nigam will give its final word Wednesday whether it is to go ahead with the 402 MW Arun III project, fulfilling all conditions set by the government.

A source involved in negotiations with Sutlej since Sunday in Kathmandu said that during Tuesday's discussions the Sutlej team appeared close to agreeing to the government's condition of 21.9 percent free energy to Nepal from the project.

Also, Sutlej became softer in its demands that Nepal bear the costs of transmission lines, roads and project studies, apart from extending the project ownership time for the developer from 30 to 35 years beginning with the issuance of construction license.

"However, they have said that they will give their final word on Wednesday," said the source. In case Sutlej pulls out, the project will in all likelihood be awarded to India's Jindal Steel and Power, which has already offered 21.9 percent free energy.

A government team has been negotiating the project with Sutlej following a cabinet decision last December to negotiate with companies in descending order of a ranking prepared by a taskforce led by former secretary Bhanu Prasad Acharya last year.

Though Sutlej was ranked second for Arun III, the team has been negotiating with it as first ranked GMR Energy Ltd has already bagged the Upper Karnali, which was also awarded through a similar process. The cabinet had directed that one developer be awarded only one project.

Source: The Kathmandu Post,