KATHMANDU, Aug 19: The financial and infrastructure committee of the cabinet on Sunday decided to renew the license of Nepal Water and Energy Development Company (NWEDC) for construction of the 216 MW Upper Trishuli -1 Hydropower Project.
The license of NWEDC was scrapped by the energy ministry two months ago after the former failed to complete the required project works for acquiring power generation license within the five-year license period.
Finance Minister Barshaman Pun said the company should complete the remaining project works within 18 months. “We decided to renew the license for another 18 months. However, the license would be scrapped if it fails to complete the necessary project work within the period,” Pun said.
The meeting of the committee four days ago could not take any decision after ministers differed over whether or not to renew license of the company. “Most of the ministers agreed to renew the license as the company had almost completed the necessary project works. So we decided to provide the company a little more time to complete the remaining works,” said Minister for Environment Keshav Man Shakya.
The cabinet will renew the license under section 35 of the Electricity Act which gives the government the power to issue license to an eligible company. Earlier, the energy ministry had scrapped the license invoking the same act, which also gives the government the power to scrap the license of a company that fails to complete survey work within the license period.
The cabinet decision has left officials at the energy ministry frustrated. “The cabinet decision has humiliated us. The government decision has proven that lobbying can make anything possible in the country,” said a highly-placed source at the energy ministry.
According to sources at the energy ministry, the prime minister had exerted pressure on Energy Secretary Hariram Koirala to renew the license of NWEDC. Following this, Koirala had forwarded the issue to the cabinet.
“As the company has almost completed feasibility study and financial closure, we agreed to give it some more time to complete the remaining works,” added Shakya.
Sources at the environment ministry said the company had submitted Environmental Impact Assessment (EIA) report a week before the license was scrapped. “We haven´t approved EIA report as we need some time to study it. The energy ministry scrapped the license before we could complete study of the report,” said a highly-placed official at the environment ministry.