Crucial projects in limbo as IBN board meeting stalled
Kathmandu, October 24
While the government keeps harping on creating investor-friendly environment in the country, decisions related to some critical projects have been stalled as not a single board meeting of the Investment Board Nepal has been held after formation of the Pushpa Kamal Dahal-led government on August 4.
Even though nearly three months have passed after the change of guard, the prime minister has not given time for a board meeting despite repeated requests from IBN officials.
IBN is a prime minister-led body formed to facilitate and promote both local and foreign investment in the country.
The major agenda of the next IBN board meeting, which is unlikely to be held in the near future as Tihar festival is just around the corner, includes progress report of some projects such as setting up a chemical fertiliser plant, the Kathmandu monorail project, and deadline extension for two hydropower projects, namely, Upper Karnali and Arun III.
IBN needs to receive the go-ahead from its board for execution of the chemical fertiliser plant, monorail project and others. Similarly, GMR Energy of India, the developer of Upper Karnali Hydropower Project; and Satluj Jal Vidyut Nigam Ltd (SJVNL), the developer of Arun III, have sought one-year deadline extension to achieve financial closure as last year’s earthquake and supply disruptions, among other reasons, had affected their work schedule.
GMR Energy of India was supposed to achieve financial closure on September 19. However, the developer sought an extension stating that the government had not fulfilled its commitment included in the agreement such as providing land for the project. Reportedly, the Ministry of Forest and Soil Conservation is yet to clear the process of providing land to develop the project.
SJVNL has also sought extension of its financial closure deadline, which is going to end on November 26. SJVNL has notified IBN that it is negotiating with power utilities in India for financial closure.
While signing the Project Development Agreement, both the developers had agreed to achieve financial closure within two years of the date of signing the PDA. As the IBN board meeting has been stalled ever since the new government was formed, the proposal put forth by the developers has not been discussed yet.
Only the prime minister-led board can extend the time for financial closure.
IBN CEO Maha Prasad Adhikari said the board had briefed the PM and other board members as well as the vice-chairman of National Planning Commission on the projects initiated by IBN.
The PM-led board also comprises ministers for finance; industry; forest and soil conservation; energy; physical infrastructure and transport; information technology and communications; and culture, tourism and civil aviation as members.