"Next Generation Will Not Have To Suffer Load Shedding"
Gyanendra Bahadur Karki
Minister of Water Resources GYANENDRA BAHADUR KARKI has been heading the portfolio of water resources for almost one and a half year. Although he always keeps himself in low profile, Congress Central Committee member Karki remains an important player within Nepali Congress. At a time when country has been passing through a severe power crisis with six hours of daily load shedding, Minister for Water Resources, Karki spoke to KESHAB POUDEL on various issues of power sector at his office on Thursday morning. Excerpts:
When will the situation improve?
As you know, we are compelled to cut down the power supply since our power generation capacity has gown down drastically because of reduction of water in snow fed rivers. Since we have been making efforts to import about 40 MW power from India, load shedding hours will be reduced soon.
How long will that take?
We are in the process of negotiations. It will be settled within shortest period of time.
Don't you think the present power crisis has already sent wrong signal to investors?
There is no doubt that current load shedding has sent a bad signal. But, nobody can do anything to change the present power situation without adding power in our national grid. This is not a result of one or two years of mismanagement but a gap of the projects in the last one decade.
Since there was a severe load shedding last year also, why did you not make any effort to preempt the present situation? It is not in the capacity of anybody to bring the change. I have already made efforts to preempt such situation in future. After the completion of Kali Gandki A project, we have not constructed any major project to meet the growing annual demand of power. We have added just few MW of power. Had Middle Marsyangdi project completed on time, the situation would have been little better. I will assure you that country's next generation will not have to see the load shedding like present one.
On what basis are you saying that there will be no power cut in future?
After my appointment 18 months ago as a minister of water resources, I took initiative to build new project for domestic consumption as well as for export. To cope with the present load shedding, I have proposed Upper Tamakoshi project with Nepalese investment. I am very proud to say that Employment Provident Fund has already agreed to invest in the 302 MW Upper Tamakosi Project. This is a major breakthrough. NEA board has already decided to move forward.
Do you have other projects in mind?
We are also working to develop 111 MW Upper Seti storage project. NEA has already forwarded the project. NEA is also negotiating for soft loan from China to start Trishuli A project.
At a time when you have been talking about the need to invite the foreign investors, there are number of news that local people are creating disruption in the projects, the recent example being Chamelia in far west and Chilime in central region? These are very unfortunate incidents. It is natural that people have high expectations but they have to support the project management to complete such projects which benefit them. If local people do not cooperate, the situation will arise when private sector will quietly walk out from the project.
What is the status of West Seti?
West Seti is now moving towards positive direction. Parliament's Natural Resources Committee had directed the government to get 10 percent free power from the West Seti. Our ministry is now negotiating this with SMEC. We will get about 75 MW of free power for the local consumption.
Do you believe that the West Seti Project will begin?
I am optimistic that West Seti Project will commence on its schedule. This is going to be a major project to export power to India. Many international financial institutions including Asian Development Bank, Chinese Bank and India's financial institutions led by Australia SMEC are involved in this project.
Maoists and other parties have already raised the question why only Indian companies took part in the bidding for Arun III and Upper Karnali? How do you look at it?
All companies were selected through open bidding and only those companies were invited for final round of negotiations, which met our requirements. They got it through bidding.
This is just an interim government but you have been taking decision of long term implications. How do you look at it?
This is an interim government but you cannot have interim plan in water resources. Power is a sector for long term investment and a long term planning. Personally, I believe that we must not stop the construction of the projects.
It is also said that ministry is violating the constitutional obligation as well as legal precedent by not presenting them in debate?
The projects are moving in accordance with the consent and support of all the political parties and support from the parliament. Since most of the projects are now awarded to private sectors, they do not require parliamentary sanctions. Interim constitution has not said anything about this arrangement. Nepal government's current policy is to generate 5000 MW power in one decade.
How many companies took part in bidding for Arun III and Upper Karnali?
Fourteen prestigious companies had participated in the bid for Arun III and Upper Karnali.
How much power will Nepal get from these projects?
Upper Karnali and Arun III will provide 120 MW energy free of cost to national grid. They are going to be milestones in the history of power sector.
How will you exchange power with India?
To exchange power between Nepal and India, we are constructing transmission lines in three areas now. The process of construction of 400 KV transmission line between Dhalkebar- Mujaffarpur ( Bihar), Butwal- Anadanagar, and Duhabi-Purnia ( India) have already started.
What about the improvement of national transmission line?
We are also upgrading our transmission lines of Bardaghat-Bharatpur-Hetauda.
What is the status of proposed unbundling of Nepal Electricity Authority?
There are many ways for reform and reform should be for betterment of any organization. We need unbundling but we don't have any plan to do it now. It will create problems in the management.
Do you have any plan to unbundle the NEA?
NEA is a very small organization. Breaking it into smaller organization will make the situation more complicated. This is the reason why we don't have immediate plan to unbundle it. Our priority now is to make NEA's management more efficient.
What is the target for coming decade?
Within one decade, we will complete projects with the capacity to produce 1000 MW. Then the country will not have to face the situation like the present one. Middle Marsyangdi 70 MW will be the first project, which is going to complete by October 2008 and commence the power by December 2008. After that more projects will come in line.
How do you see the involvement of private sector?
Private sectors are also constructing numbers of projects in the country. NEA has signed PPA with a joint venture company to buy 50 MW power from Upper Marsyangdi. Chinese private sectors are investing 90 percent and 10 percent is being invested by Nepalese company. This project will be complete within four years. The Korean government-owned company has shown interest to build 40 MW Upper Modi project. Norwegian company is working in Tamakoishi II and III with the capacity of 500 MW. There are many projects with capacity of 1 to 5 MW. NEA will sign PPA with these projects.
There is a tendency in the power sector to hold the hydro power licenses. How many licenses have you issued recently? In the past, it was easy to get the license and many license holders renewed by giving various reasons. Now, one has to pay annually royalty of Rs.10,000 per MW and one has to fulfill the commitments. Now you are reading the news regarding the allocation of license. The time will come when you will get the news of cancellation of license.
Have you started any new irrigation projects?
Construction of Sikta Irrigation project has already begun and initial work has already completed. Along with this, we have recently singed a loan agreement with Saudi Fund to expand Bagmati Irrigation Project. The World Bank has also provided fund to expand irrigation.
Source: Spotlight Weekly VOL. 27, NO. 20, January 25, 2007
Minister of Water Resources GYANENDRA BAHADUR KARKI has been heading the portfolio of water resources for almost one and a half year. Although he always keeps himself in low profile, Congress Central Committee member Karki remains an important player within Nepali Congress. At a time when country has been passing through a severe power crisis with six hours of daily load shedding, Minister for Water Resources, Karki spoke to KESHAB POUDEL on various issues of power sector at his office on Thursday morning. Excerpts:
When will the situation improve?
As you know, we are compelled to cut down the power supply since our power generation capacity has gown down drastically because of reduction of water in snow fed rivers. Since we have been making efforts to import about 40 MW power from India, load shedding hours will be reduced soon.
How long will that take?
We are in the process of negotiations. It will be settled within shortest period of time.
Don't you think the present power crisis has already sent wrong signal to investors?
There is no doubt that current load shedding has sent a bad signal. But, nobody can do anything to change the present power situation without adding power in our national grid. This is not a result of one or two years of mismanagement but a gap of the projects in the last one decade.
Since there was a severe load shedding last year also, why did you not make any effort to preempt the present situation? It is not in the capacity of anybody to bring the change. I have already made efforts to preempt such situation in future. After the completion of Kali Gandki A project, we have not constructed any major project to meet the growing annual demand of power. We have added just few MW of power. Had Middle Marsyangdi project completed on time, the situation would have been little better. I will assure you that country's next generation will not have to see the load shedding like present one.
On what basis are you saying that there will be no power cut in future?
After my appointment 18 months ago as a minister of water resources, I took initiative to build new project for domestic consumption as well as for export. To cope with the present load shedding, I have proposed Upper Tamakoshi project with Nepalese investment. I am very proud to say that Employment Provident Fund has already agreed to invest in the 302 MW Upper Tamakosi Project. This is a major breakthrough. NEA board has already decided to move forward.
Do you have other projects in mind?
We are also working to develop 111 MW Upper Seti storage project. NEA has already forwarded the project. NEA is also negotiating for soft loan from China to start Trishuli A project.
At a time when you have been talking about the need to invite the foreign investors, there are number of news that local people are creating disruption in the projects, the recent example being Chamelia in far west and Chilime in central region? These are very unfortunate incidents. It is natural that people have high expectations but they have to support the project management to complete such projects which benefit them. If local people do not cooperate, the situation will arise when private sector will quietly walk out from the project.
What is the status of West Seti?
West Seti is now moving towards positive direction. Parliament's Natural Resources Committee had directed the government to get 10 percent free power from the West Seti. Our ministry is now negotiating this with SMEC. We will get about 75 MW of free power for the local consumption.
Do you believe that the West Seti Project will begin?
I am optimistic that West Seti Project will commence on its schedule. This is going to be a major project to export power to India. Many international financial institutions including Asian Development Bank, Chinese Bank and India's financial institutions led by Australia SMEC are involved in this project.
Maoists and other parties have already raised the question why only Indian companies took part in the bidding for Arun III and Upper Karnali? How do you look at it?
All companies were selected through open bidding and only those companies were invited for final round of negotiations, which met our requirements. They got it through bidding.
This is just an interim government but you have been taking decision of long term implications. How do you look at it?
This is an interim government but you cannot have interim plan in water resources. Power is a sector for long term investment and a long term planning. Personally, I believe that we must not stop the construction of the projects.
It is also said that ministry is violating the constitutional obligation as well as legal precedent by not presenting them in debate?
The projects are moving in accordance with the consent and support of all the political parties and support from the parliament. Since most of the projects are now awarded to private sectors, they do not require parliamentary sanctions. Interim constitution has not said anything about this arrangement. Nepal government's current policy is to generate 5000 MW power in one decade.
How many companies took part in bidding for Arun III and Upper Karnali?
Fourteen prestigious companies had participated in the bid for Arun III and Upper Karnali.
How much power will Nepal get from these projects?
Upper Karnali and Arun III will provide 120 MW energy free of cost to national grid. They are going to be milestones in the history of power sector.
How will you exchange power with India?
To exchange power between Nepal and India, we are constructing transmission lines in three areas now. The process of construction of 400 KV transmission line between Dhalkebar- Mujaffarpur ( Bihar), Butwal- Anadanagar, and Duhabi-Purnia ( India) have already started.
What about the improvement of national transmission line?
We are also upgrading our transmission lines of Bardaghat-Bharatpur-Hetauda.
What is the status of proposed unbundling of Nepal Electricity Authority?
There are many ways for reform and reform should be for betterment of any organization. We need unbundling but we don't have any plan to do it now. It will create problems in the management.
Do you have any plan to unbundle the NEA?
NEA is a very small organization. Breaking it into smaller organization will make the situation more complicated. This is the reason why we don't have immediate plan to unbundle it. Our priority now is to make NEA's management more efficient.
What is the target for coming decade?
Within one decade, we will complete projects with the capacity to produce 1000 MW. Then the country will not have to face the situation like the present one. Middle Marsyangdi 70 MW will be the first project, which is going to complete by October 2008 and commence the power by December 2008. After that more projects will come in line.
How do you see the involvement of private sector?
There is a tendency in the power sector to hold the hydro power licenses. How many licenses have you issued recently? In the past, it was easy to get the license and many license holders renewed by giving various reasons. Now, one has to pay annually royalty of Rs.10,000 per MW and one has to fulfill the commitments. Now you are reading the news regarding the allocation of license. The time will come when you will get the news of cancellation of license.
Have you started any new irrigation projects?
Construction of Sikta Irrigation project has already begun and initial work has already completed. Along with this, we have recently singed a loan agreement with Saudi Fund to expand Bagmati Irrigation Project. The World Bank has also provided fund to expand irrigation.
Source: Spotlight Weekly VOL. 27, NO. 20, January 25, 2007
