Indian firm ‘bags’ Arun III, Upper Karnali

Kathmandu, July 8:

Indian firm GMR Infrastructure has reportedly bagged the Upper Karnali (UK) and Arun III hydroelectricity projects while it is expecting to also bag Upper Marsyangdi II and III.

The company has plans to generate 952 megawatt of power in Nepal and market it in India through Power Trading Corporation (PTC).

The report to this effect, filed from Mumbai, appeared in the July 5 edition of the Economic Times.

While the installed capacity of Upper Karnali and Arun III is 300 megawatt and 402 megawatt respectively, the installed capacity of Upper Marsyangdi II and III put together is 250 megawatt.

Both the export-oriented hydro-electricity projects (Arun III and Upper Karnali) are to be implemented on a Build Operate Own and Transfer (BOOT) model for a 30-year period that includes construction.

Under the conditions, which have come to light earlier, ownership will be handed over to Nepal after three decades. Besides the free power, Nepal also retains the right to purchase up to 10 per cent of the power generated at the projects, the report further said.

GMR has offered Nepal 33 per cent free equity in the Upper Karnali, apart from 7.5 per cent free energy. The proposal also includes two-and-a-half-years to prepare for the project and four-and-a-half-years for construction, including financing with a debt-equity of 75:25.

In Arun III, the company will share 15 per cent of the power in the first 15 years of operation and 10 per cent for the remainder of the licence period. The report has quoted sources, saying “the ministry has decided to award the hydropower projects to GMR, at the recommendation of the evaluation committee.”

But spokesman for the Ministry of Water Resources, Anup Upadhayay, temporised when asked to comment on the latest development merely saying “I am not aware of such a decision.”

It may be recalled that the task force headed by former secretary Bhanu Prasad Acharya had recommended that GMR be awarded the two projects in a report submitted to government two months ago.