GMR project halted in Nepal

IANS, 17-Feb-09

A year after it broke the ice in Nepal’s politically charged hydropower sector by becoming the first Indian company to win a major power project, GMR Energy is now facing the pricks experienced by other foreign investors with work obstructed by villagers in remote western Nepal.

GMR Energy’s associate vice-president (hydro business) Harvinder Manocha flew down to Kathmandu from New Delhi Tuesday to firefight the obstruction to the 300-MW Upper Karnali hydropower project that spans three remote districts.

Villagers stopped work in the Bhairavsthan area of Accham district and Satla in Dailekh from Sunday, alleging that the company had not informed them about the work.

On Feb 11, a local committee formed by residents of these two and three other villages issued a statement, warning they would stop work if their demands were not met.

Local dailies quoted GMR officials as saying that the obstruction was causing a loss of Nepali Rs.10 million (Rs.623,800) per day.

GMR Energy officials have reportedly written to the chief district officers of Achham, Dailekh and a third district Surkhet, that too will come under the ambit of the project, seeking security.

All three districts are Maoist strongholds. Ironically, during the 10-year Maoist insurgency, the project could not be developed due to the lack of security in the region.

Last year, GMR Energy pipped several formidable Indian bidders to wrest the licence for the hydropower project that they target to develop in seven years.

Another foreign investor, Australian Snowy Mountain Energy Corp, is also finding it an uphill task to develop the 750-MW West Seti project, Nepal’s biggest hydropower deal, due to local resistance.

India is closely watching the progress of work on West Seti in western Nepal, in which the Mumbai-based Infrastructure Leasing and Financial Services is a partner. The Indian government-owned Power Trading Corp will purchase the power.

While new projects are moving at snail’s pace due to local obstruction, Nepal is smarting under a massive power crisis with nearly 18-20 hours’ blackout daily.

The GMR problem comes at a time when India’s foreign secretary Shivshankar Menon is in Kathmandu to review the progress of the commitments made by Nepal during Prime Minister Pushpa Kamal Dahal Prachanda’s visit to New Delhi last year.

They include working with India for mutual benefit to generate 10,000 MW of power in the next decade that could transform Nepal’s economy.