Submit your Article

Indian officials have raised concern over the Supreme Court's decision to issue an interim order staying the government’s decision to extend the deadline for GMR Energy to complete the financial closure of the 900-megawatt Upper Karnali Hydropower Project. The interim order has thrown the project’s future into uncertainty as GMR won’t be able to work towards financial closure now. Financial closure means ensuring enough resources to implement the project. GMR in mid-November last year had filed a petition to vacate the stay order, arguing that the court’s decision would further delay the project works. In response Supreme Court justice duo Kumar Regmi and Til Prasad Shrestha on Jan 3 forwarded the dispute of the Upper Karnali Hydropower Project to the constitutional bench, citing concerns about constitutional interpretation. With the license of the major hydropower project funded by a leading Indian company hanging in the balance, the Indian officials are concerned about the situation. During his recent Nepal visit, Indian Foreign Secretary Vinay Mohan Kwatra had also raised the issue with the Nepali officials. “When he met with Deputy Prime Minister and Minister for Energy, Water Resources and Irrigation Minister Rajendra Lingden on February 14, he had asked about what was happening with the Upper Karnali project,” said a senior official at the Energy Ministry. “We notified the Indian foreign secretary that the Nepal government has owned up the issue and already demanded the court to vacate its interim order.” The official said that they also notified the Indian foreign secretary that the government has responded to the court, saying that as the Indian company was preparing to sign a power purchase agreement with Bangladesh, the deadline extension for financial closure was necessary. Indian government officials also raised the issue during the 10th joint secretary-level Joint Working Group and the secretary-level Joint Steering Committee held in Jaipur, India on February 17-18. They were concerned about the investment climate for India-invested projects in Nepal, according to one Nepali delegation member. “While they didn’t specifically focus on the Upper Karnali project, it was clear to understand that they were  hinting at the problem faced by GMR Energy,” said the delegation member. Citing a number of reasons, a single bench of Justice Ishwar Prasad Khatiwada had issued the interim order not to implement the decision until the final verdict on the matter. The Supreme Court’s interim order came at a time when the Indian company was preparing to sign a trilateral power sales agreement with the Bangladesh Power Development Board and NTPC Vidyut Vyapar Nigam Limited (NVVN). Bangladesh signed a memorandum of understanding with India’s NVVN to import electricity from the Upper Karnali project via India during Bangladeshi Prime Minister Sheikh Hasina’s visit to New Delhi in April 2017. Bangladesh has already issued a letter of intent to GMR Group expressing its interest to enter into a contract to purchase 500 MW of electricity from Upper Karnali. The power purchase agreement rate was also agreed upon between GMR Energy and the Bangladeshi authority at 7.712 cents per unit for a period of 25 years. However, the court issued an interim order based on the lack of the continuation of deadline extension since its deadline was last extended on November 10, 2017, for one year. “After the expiry of the deadline, no decision was taken to continue the agreement,” the court observed. “In the context where the last deadline expired three years ago and there has been no other extension, there is no logical justification to extend the deadline by two years from July 15 this year.” Officials at the Investment Board Nepal admit that indecision on the part of the board on extending the deadline as demanded by the Indian company was the main reason why the issue reached the Supreme Court. “The Indian company failed to accomplish the financial closure in time,” a lawyer with knowledge of the matter said. “The Investment Board also failed to take timely decisions on the extension which has now cast doubt on the future of the project.”

The Hupsekot Rural Municipality in Nawalparasi (Bardhaghat Sustapurba) has offered Rs 5 in grant for each liter to encourage the farmers for milk production. The amount would be given to the farmers through cooperatives. The rural municipality said that the decision is a part of its policy to give grants on the basis of production. Chairman of Hupsekot Rural Municipality Laxmi Devi Pandey said provisions to give grants to the farmers are arranged based on the yearly report shared by the milk cooperatives in the rural municipality. “Our goal is to increase milk production in the rural municipality by encouraging the farmers,” Pandey said. Pandey hoped that the decision of the local government would largely benefit the small farmers. In the last fiscal year, the rural municipality provided a cash subsidy to the farmers through two cooperatives and the farmers were given Rs 254,235 in cash. Pandey also shared that the quantity and farmers getting cash subsidy for the milk production could increase this year compared to the last year. The Hupsekot Rural Municipality has forwarded this scheme to make it a self-reliant on milk production by luring the farmers. Naya Dutta Gautam, a farmer engaged in animal husbandry, termed the rural municipality’s move as praiseworthy. The rural municipality has also given 50 percent in grants to the farmers for the payment of insurance premium under the livestock insurance scheme.  

The price of gold has dropped by Rs 200 per tola in the domestic market on Tuesday. According to the Federation of Nepal Gold and Silver Dealers’ Association, the yellow bullion is being traded at Rs 103, 000 per tola today. The yellow metal was traded at Rs 103, 200 per tola on Monday. Meanwhile, tejabi gold is being traded at Rs 102, 500 per tola. It was traded at Rs 102, 700. Similarly, the silver is being traded at Rs 1,290 per tola today.

The physical progress of the construction of the roads, bridges, and railway network has been sluggish during the first six months of the current fiscal year. The data of the Ministry of Physical Infrastructure and Transport shows major infrastructure projects recorded zero progress to limited progress with none of the major projects under the ministry witnessing significant progress in the first half of the current fiscal year. For instance, the government has targeted to construct the 10 kilometers section of the Khadbardi-Kimathanka road under the Koshi Corridor in FY 2022/23. As of the first half of the fiscal year, there has been no progress in the project at all. The government plans to upgrade this road which connects China’s other border point, to the blacktopped level. Likewise, the government has been widening the East-West Highway into four lanes from the current two lanes. The progress of the project has remained dismal with just 200 meters being widened during the first half of this fiscal year. The government has a target of widening 90 kilometers by the end of the current fiscal year. There has been little progress in the construction of the Hulaki Highway and the Mid-Hill Highway projects, but the overall progress remains disappointing. Only 29.2 kilometers of Hulaki Highway was improved in the first six months against the annual target of 250 kilometers. The government has targeted to complete construction of 356 kilometers in the current fiscal year, but 28.3 kilometers were constructed in the first six months of this fiscal, according to the ministry. Only two kilometers of black-topped roads were completed under the four-lane road network so far, this fiscal year against the annual target of constructing 100 kilometers. Likewise, only 800 meters of blacktopped roads whose width is above four lanes, have been completed during the first half of the current fiscal, according to the ministry. The target was to complete 16 kilometers by the end of the current fiscal year. When it comes to two-lane blacktopped roads, construction of 118.83 kilometers was completed nationwide in the first six months of this fiscal against the annual target of 1,400 kilometers. The physical progress of the construction of bridges is similar to that of the roads. The government has the target of completing 290 bridges on the two-lane roads. But the physical infrastructure ministry said that only 39 bridges were completed during the first six months of this fiscal. But not a single bridge was completed on the roads which are wider than two lanes, according to the ministry’s data. The government has the target of constructing 10 bridges on such roads by the end of the current fiscal. Likewise, the sluggish progress in the construction of railway lines has also affected the projects. The Department of Railway has been working on track opening for the railway projects, particularly for the proposed East-West Railway. The track opening of 700 meters has been completed of the proposed railway so far against the annual target of 12 kilometers in this fiscal year. The dismal physical progress of the projects is also reflected in poor capital spending by the agencies under the physical infrastructure ministry. As per official statistics, the ministry recorded only 14.59 percent of capital spending during the first half of the current fiscal. "Rainy season and mobilization of govt employees in the election are the major reasons behind slow progress," said a senior official of the Department of Road. However, contractors have a different take. "Govt has not been making a timely payment for the work which has affected the contractors' ability to expedite works," said a member of the Federation of Contractors' Association of Nepal (FCAN).