Kathmandu, July 7
The Supreme Court has barred the government from extending
the deadline for the financial closure of the 900-megawatt Upper Karnali
Hydropower Project.
Making public the full text of the verdict issued by the
constitutional bench of the SC on the case filed against the government’s
decision to extend the deadline for financial closure for the Grandhi Grandhi
Mallikarjuna Rao (GMR), the Indian promoter of the Upper Karnali Hydropower
Project, the court allowed the government last decision to provide a two-year
time period for financial closure but barred the latter from extending it
further.
The SC issued its verdict on May 7 this year. However, on
November 3 last year, the SC had issued an interim order against the
government's decision to give additional time for the company for the financial
arrangement.
According to the court verdict, the company will get
additional six months since the interim order to alter it in May – which means
it can finalise the financial closure by February 2024.
Stating that the company failed to arrange financial resources
to develop the project for a decade and the project had got enough time for the
same, the court said that further extension of the deadline would be against
the public aspirations for development and prosperity and public policy. It
also asked the government to proactively implement the project.
Meanwhile, the SC also issued an order in the name of the
government to complete the land acquisition in Achham district which has been
remaining stalled although there had been successful coordination for the same
in other locations.
A Cabinet meeting in mid-July 2022 decided to extend the
financial closure deadline for the GMR till mid-July 2024. Ratan Bhandari had
filed a writ at the SC against the decision.
However, the court had denied issuing certiorari and
mandamus against the government as demanded by the petitioners as there was no
a condition that the deadline was against the constitution or the law of land. "The
project development agreement with the company was not the one which should be
approved by the parliament but it is a business agreement signed with the
government and company established in Nepal," read the verdict.
The SC also refrained from questioning the government's
wisdom regarding the addendum for financial closure as it is being considered
as the final extension of the deadline.
The SC verdict also directs the concerned parties not to
make a negative impact on the water supply or irrigation projects in the
Karnali watershed areas as the Water Resources Act-1992 maintained that the use
of water resources is a priority. Likewise, it said that the people in the area
should be benefitted from the revenue generated from the project.
Upper Karnali is a large picking run-of-the-river project
being developed in Karnali province in Achham, Dailekh and Surkhet districts.
The initial project cost was estimated at Rs. 116 billion in 2011. As per the
agreement signed with the GMR, Nepal would receive revenue of Rs. 431 billion
during the concession period (25 years from the date of power generation), 108
MW free energy, 27 per cent free share to the Nepal Electricity Authority, and
shares worth Rs. 1.6 billion would be sold to the local people.
According to the Investment Board Nepal, the project was
expected to create 3,000 direct jobs during the construction period of five
years and support 2-MW energy for the rural electrification.
Published in The Rising Nepal daily on 8 July 2023.
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