License issued sans competition

HIMALAYAN NEWS SERVICE

KATHMANDU: The Ministry of Energy has decided to issue license to Khimti-II (27.2 MW) hydro project to a co-operative flouting government regulations.

The ministry, which had earlier decided to issue permits on competitive basis only, has amended its working procedure to scrap the provision and add a clause that a co-operative could also be granted a license, sources said.

“The license to the project has been awarded to People’s Co-operative Hydro Company,” said the source.

As per the rules authorities should issue conduct a competitive bidding process to issue licenses for projects with proposed capacity more than 10 MW. The proposed power project lies in Dolakha and Ramechhap and is estimated to cost around $4.5 million.

Although some officials were reluctant to issue the license by violating rules high level officials at the ministry forced the Department of Electricity Development to prepare the documents. “The decision to award the license was taken today,” said an official at the ministry seeking anonymity.

The department had forwarded the project’s file to the ministry two months ago after the ministry officials asked it to prepare license papers. Sources, said department officials had advised not to issue licenses on ad-hoc basis by violating rules. They had also demanded that a reliable developer be sought through open competition.

The government two years ago had called for interested parties to file an Expression of Interest application for the license, worth Rs 50 million, but no one had applied. Then Energy Minister Gokarna Bista again decided to issue licenses only on competitive basis. The government had issued a license to a Norwegian company, SN Power, to develop the project but it was later scrapped.