Nepal | September 21, 2020

Apex court rules in favour of TBI Holdings

Says MoE can award licence of above 500MW hydro projects through bilateral negotiations

Himalayan News Service
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Kathmandu, December 26

Amidst the dispute between Investment Board Nepal (IBN) and the Ministry of Energy (MoE) on who has the jurisdiction to deal with hydropower projects of above 500 megawatts, the Supreme Court has issued a verdict in favour of TBI Holdings, which had obtained the survey licence of 650MW Tamakoshi III project through bilateral negotiations with MoE in October.

The division bench of Judges Purushottam Bhandari and Bam Kumar Shrestha of the Supreme Court has ruled on the writ petition filed by an advocate Khadga Bahadur Budhathoki on Sunday. The verdict says that the MoE can award projects through bilateral negotiations as per the prevailing laws.

Budhathoki had filed a writ petition on November 7 seeking an interim order on the MoE’s decision. The petitioner had named the Office of the Prime Minister and Council of Ministers, Ministry of Finance, Ministry of Energy, Department of Electricity Development and TBI Holdings as defendants.

The IBN and MoE, which are both government authorities, were locked in dispute regarding the jurisdiction issue.
Following the MoE’s decision to award the licence of Tamakoshi III, the IBN had shown dissatisfaction stating that the Investment Board Act, 2010 clearly defines the role of IBN in dealing with projects with capacity of 500 megawatts and above. However, the MoE had said that it had awarded the project to domestic investor — TBI Holdings — on the ground of section (35) of the Electricity Act, 1992. As per a provision in the law, MoE can award the project to a credible party through bilateral negotiations.

Dinesh Kumar Ghimire, spokesperson for MoE, refused to comment on the matter citing that they had not received the full text of the verdict. However, he said that there is no issue of breaching the jurisdiction of each other as IBN and MoE are both government authorities and MoE has not awarded projects that IBN has been overseeing.

Citing that the Investment Board Act is not a substitute of the Electricity Act, he further said that MoE has the right to issue licence for all strategic projects, including transmission lines.

Other projects of above 500 megawatts capacity awarded by the MoE can move ahead based on this verdict on the Tamakoshi III case.

However, IBN officials have said that awarding projects through bilateral negotiations is not a transparent way and
the government has established a separate institution to deal with mega hydropower projects and Tamakoshi III is a project that has been listed by IBN in their project bank and has been showcased to attract foreign investment. On the other hand, IBN follows the transparent practice of competitive bidding.

The Norwegian company Statkraft (previously SN Power) had already surveyed the project and the IBN was negotiating for project development agreement (PDA) talks with Statkraft. However, Statkraft had pulled out from Tamakoshi III in January 2016 following the devastating earthquakes that badly hit the project area.

 


A version of this article appears in print on December 27, 2017 of The Himalayan Times.


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