MoWR refuses renewal of licence

Kathmandu, May 21:

A hydropower developer has protested the government’s decision of not renewing its licence for the production survey of 101-MW Tamor-Mewa hydropower project in Taplejung district.

The government had awarded production survey licence to Spark Hydroelectric Company Ltd (SHCL), a public limited company promoted by Nepali entrepreneurs and developers, for Tamor-Mewa project on March 20, 2006 with a validity period of 18 months that was to expire

on September 24, 2007.

The Ministry of Water Resources (MoWR) through a secretary level decision, recently, refused

to renew the licence it had given to SHCL on January 22 this year. MoWR has cited

‘unsatisfactory progress’ for not renewing the project licence, the company claims.

Bhanendra Kumar Limbu, chairman and managing director of SHCL, says “the explanations served by the ministry are not adequate and justifiable. SHCL has been submitting progress report every six month since the company acquired the licence.”

According to him, SHCL had applied for a renewal of licence on September 23, 2007 through the Department of Electricity Development (DoED) and paid one million rupees fee. “We even had clearly spelled out the reasons for a delay in project, as SHCL had acquired the licence when conflict was at its pea.”

Despite many odds and difficulties, SHCL has made ample progresses during the last two years, he claims, adding that a crucial component of the project development — financial arrangement — has also been successfully completed. According to him, SHCL had commitment from a Spanish company — Protocol International Funding Services — for a loan investment of 75 per cent of total project cost Rs 14.30 billion.

Likewise, SHCL had also signed a memorandum of understanding (MoU) with a consortium led by Unitech Energy Inc Group, USA to finance up to 55 per cent of total cost and provide technical support. The member companies of the consortium included LMZ Company of Russia, UB Engineering Ltd and Backbone Projects Ltd, India.

“We have multiple options on financial matters for the project as well as marketing of power. SHCL had already received a Letter of Intent from the Power Trading Corporation (PTC) India to export electricity to India,” he says.

Besides submitting the progress report on time, SHCL had furnished detailed investment plan (with sources) at the ministry through DoED and had applied for the renewal on time fulfilling

all the procedures, according to him.

“But, the government refused to renew the licence without furnishing any satisfactory explanation.”

In contrast, DoED has accepted an application of another company — Imex International on September 7, 2007 — for the licence that had been already awarded to some other company.

“How can the DoED accept application for the same project even before the SHCL’s licence validity period expires,” he asks.

Questioning the intentions of the senior officials at the DoED and the ministry, Limbu says,

“The government must roll back its decision and allow us to work freely. Otherwise we will be forced to protest.”