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The new fiscal budget presented on Thursday has effectively halted the progress of around 17,117 MW of run-of-river (RoR) hydropower projects in Nepal by introducing a major policy shift in the Power Purchase Agreement (PPA) model.

Until now, RoR projects operated under a ‘Take or Pay’ PPA model, where the Nepal Electricity Authority (NEA) had to pay private developers regardless of whether it used the electricity or not. The latest budget, however, proposes a shift to a ‘Take and Pay’ model, meaning the NEA will only pay for the electricity it actually purchases.

Ganesh Karki, President of the Independent Power Producers’ Association of Nepal (IPPAN), warned that this policy change could render investments already made by private developers in RoR projects unviable. He said banks are unlikely to finance projects under the new PPA model, pushing many developments to the brink of cancellation.

According to IPPAN, 17,117 MW worth of RoR projects currently hold licenses from the Department of Electricity Development, with approximately Rs 66bn already invested. These projects are in various stages of development, awaiting PPAs and financial closure. Once fully implemented, total investment could reach Rs 3.4trn. The breakdown includes 2,078 MW of projects already under construction, 6,436 MW awaiting construction permits, 5,079 MW with survey licenses, and 3,521 MW awaiting survey permits.

This shift has frustrated private developers who had expected the budget to align with the government’s recently unveiled Energy Development Roadmap, which aims to generate 28,500 MW of electricity—15,000 MW for export to India and 13,500 MW for domestic consumption.

IPPAN claims the new provision makes it nearly impossible for the private sector to move forward, despite other budget promises like streamlining forest clearance, transmission line construction, and support for reservoir-based projects. Karki argued that unless developers can build the projects, these other incentives become meaningless.

“The government’s move has placed private developers in a position where their investment could drop to zero,” Karki said. “The state should not have issued licenses in the first place if it planned to later change the agreement terms. The Department of Electricity Development continues to issue licenses, but developers are now left in limbo.”

NEA sources said the switch to ‘Take and Pay’ is necessary for the financial sustainability of the authority. The previous model, where payments had to be made even without actual power usage, posed significant financial risks—especially during the monsoon when RoR production exceeds domestic demand and guaranteed exports to India remain uncertain.

IPPAN has strongly opposed the shift and announced plans to launch protests if the decision is not reversed. In a statement released Friday, IPPAN described the new policy as hostile to private investment and a setback for Nepal’s power sector. The group also criticized the government for failing to support the ongoing development of RoR projects, which they claim still constitute a majority of the private sector’s hydropower activity.

IPPAN called for an immediate revision of the policy and demanded a return to the ‘Take or Pay’ model. Failure to do so, they said, would prompt a “strong and decisive” protest campaign.

Currently, Nepal’s total electricity generation capacity is about 3,600 MW, with over 80 percent contributed by the private sector. Of the 17,117 MW of RoR projects awaiting PPAs, the NEA or the government is developing only 190 MW.

IPPAN argues that the new provision contradicts the Energy Development Roadmap and the goals set out in the 16th Five-Year Plan of the National Planning Commission. The association also claims the decision violates existing policies and legislation, including the Electricity Act 1992, the Hydropower Policy 2001, and the National Water Resources Policy.

The organization fears that this policy change will derail over Rs 1.5trn already invested by the private sector, and jeopardize an additional Rs 3trn planned for future investment, pushing the entire sector into uncertainty.

Most recently, top bureaucrats have pushed to remove the cooling-off clause from a bill passed by the State Affairs and Good Governance Committee of the House of Representatives. This clause provides that civil servants become eligible for political appointments only after two years of retirement. The objection from senior officials has triggered widespread debate about the importance of cooling-off periods and the broader implications of the revolving door phenomenon.

When public officials move quickly into private or political roles after their tenure, it raises serious concerns about conflicts of interest, fair governance and the credibility of public institutions. To reduce these risks, many countries have introduced “cooling-off periods” or “revolving door laws” to restrict such movements for a certain time. In Nepal’s case, this issue calls not just for clause-based reforms but for a full legal framework that addresses all aspects of post-retirement appointments.

Global approaches and legal foundations

The concept of a cooling-off period took root in the United States with the Ethics in Government Act of 1978, introduced after the Watergate scandal. This law prohibited former public officials from lobbying the departments where they previously worked for a certain period. Later, the Lobbying Disclosure Act of 1995 reinforced these efforts by setting clear one- or two-year bans for high-ranking officials entering lobbying roles. The objective was to prevent future private benefits from influencing decisions made during public service.

India also recognized this issue. The All India Services (Conduct) Rules prevent retired civil servants from taking up commercial jobs without prior government approval. In Center for Public Interest Litigation v Union of India (2011), the Supreme Court of India emphasized the need for ethics in public life, particularly when it comes to awarding contracts or appointing regulators. The Court pointed out the dangers of private companies using insider information gained during government service. However, enforcement and political commitment remain inconsistent.

The United Kingdom has implemented a more structured system. It established the Advisory Committee on Business Appointments (ACOBA), which reviews post-service job proposals by ministers and senior officials. While ACOBA's advice is not legally binding, public and media scrutiny help discourage questionable transitions. In the case of Porter v Magill, 2001, UKHL 67, the House of Lords stressed administrative fairness. The Court ruled that any decision could be struck down if a “fair-minded and informed observer” believed there was a real chance of bias. The case involved a council trying to manipulate housing policies for political benefit, highlighting the importance of impartial governance.

Nepal’s framework and challenges

Nepal has recognized the importance of cooling-off periods in various sectors, though its application remains fragmented and inconsistent. For example, the Nepal Rastra Bank Act prohibits employees of the Nepal Rastra Bank (NRB) from joining banks and financial institutions (BFIs) for up to three years after leaving their positions. This provision reflects an awareness of potential conflicts of interest in the financial sector and seeks to safeguard public trust. In the judiciary, the Constitution imposes restrictions on judges, allowing them to take on only certain specialized roles as explicitly permitted. Judges also regularly recuse themselves from cases where there is a potential conflict of interest or a reasonable perception of bias.

One of Nepal’s key issues is the absence of an independent institution to review post-retirement appointments. Unlike the UK’s ACOBA, Nepal has no formal mechanism to assess whether a new role for a former official might pose risks of undue influence. Appointments to important bodies, commissions and advisory groups often lack transparency and are based more on political links than merit. The proposed Federal Civil Service Bill 2023 introduces a two-year cooling-off period requiring government approval before any constitutional, political, and diplomatic appointment. Yet, recent opposition from senior officials illustrates the challenge of implementing these rules when personal interests are at stake.

High-ranking civil servants frequently take on politically sensitive roles soon after retiring, undermining the independence and credibility of the institutions they join. The law also lacks a clear definition of “political appointment,” allowing for vague interpretations and selective enforcement. This legal gap makes it easier for influential individuals to bypass accountability.

To improve governance, Nepal should move toward passing a comprehensive revolving door law. Such a law should provide clear definitions of post-retirement roles, specify which types of appointments are restricted, and create an independent ethics body with authority to investigate and enforce the law. This would help ensure that decisions made in public service are not influenced by future personal benefits.

Nepal can also learn from global experiences. Requiring public disclosure of post-retirement roles and decisions made by a reviewing authority would increase transparency. Similarly, issuing a “cooling-off certificate” before an official takes a new job could create a system that is both fair and regulated.

Conclusion
For Nepal to build stronger democratic institutions and maintain public confidence, it must develop a unified, binding legal framework to manage post-retirement roles for public officials. A clearly-defined cooling-off period, backed by an independent review mechanism and precise legal definitions, will help prevent conflicts of interest and promote ethical governance.

The ongoing parliamentary discussions offer a timely opportunity to address this issue. Although there is resistance from vested interests, lawmakers must prioritize reforms that reflect the public interest. Transparency, impartiality and integrity should guide Nepal’s governance. By adapting successful global practices to the national context, Nepal can ensure that public service remains a commitment to the nation—not a shortcut to personal advantage.

Twenty-eight-year-old Neema Sherpa from Kathmandu vividly recalls the incident when she became a victim of a hit-and-run case. “The bike hit me when I was crossing the road at the zebra crossing,” she explains. Although a zebra crossing is designed for pedestrian safety, her experiences raise serious questions about riders’ accountability and the enforcement of traffic rules.

The rising cases of accidents underscore the critical importance of road safety to ensure a safer transportation system.  Bibek Thapaliya, a bike rider from Kathmandu, says with the rise of traffic accidents, his parents are worried about his safety. Thapaliya’s parents are not alone. Rajani Karki reflects her experience as a parent. “I remember the day when I allowed my daughter to ride a scooter on the road. My anxiety grew when she didn’t come home on time,” she says. 

This incident raises questions not only about the state of road safety but also about the psychological stress that families endure amid rising accident cases. Despite these fears, not all riders exercise caution. One  anonymous rider from Kathmandu admits to frequently violating the traffic rules. “When stuck in a jam, many young riders, including myself, tend to violate rules in an attempt to get ahead,” he says. 

Peer behaviour and pressure often contribute to such recklessness among young riders. This tendency is supported by research from the US National Library of Medicine, which found that peer influence is a pervasive force during adolescence, one that shapes adaptive and maladaptive attitudes and behaviours. 

Pasang Tenzing Lama, another rider, believes that young people today have the mentality to impress others rather than riding responsibly. “I have seen many cases of motorcycle accidents involving young riders who were careless on the road,” he says.

Overspeeding, stunt riding, and a lack of proper safety gear are common among young riders. For many, owning a motorcycle is more than just about transportation.  “Besides avoiding the daily chaos of public transport, owning a motorcycle is also about freedom and style,” says Anish Regmi, a motorcycle rider.

But when personal satisfaction takes precedence over public safety, the consequences can be dire.

Aryan Karki (name changed), a young rider from Kathmandu, recalls his life upside down when his motorcycle collided with a bus, leaving him with multiple fractures and injuries. Karki says one moment sent him to bed for over eight months. The emotional and psychological toll of that incident still haunts Karki. “Yes, motorcycles are convenient, but a minor error can lead to years of suffering,” he says. 

Motorcycles account for the highest share of road accidents in Nepal. According to the data of Nepal Police, 25,788 vehicles were involved in accidents in the fiscal year 2019/20, and 10,869 of those vehicles were motorcycles. In the fiscal year 2020/21, out of 33,135 vehicles involved in road accidents, 17,087 were motorcycles.  In the fiscal year 2021/22, there 39,379 vehicles were involved in road accidents, and 19,974 were motorcycles. The fiscal year 2022/23 saw 23,597 accidents involving 37,393 vehicles, including 19,511 motorcycles. In the fiscal year 2023/24, 22,927 accidents were reported, with 35,404 vehicles involved, of which 19,984  were motorcycles.

So far, in the current fiscal year 2024/25, 22,860 accidents occurred, involving 34,358 vehicles, including 20,183 motorcycles, which is a high number of motorcycles being involved in accidents in these five years. In the same year, serious injuries peaked at 12,655. These data from the last five years represent the growing issue of motorcycle accidents. These disturbing cases demand urgent attention and public safety interventions. The data depicts that motorcycle involvement has remained consistently high, and they are contributing to a larger share of deaths and serious injuries.

Uttam Shrestha, a taxi driver, elaborates on the risky behavior he observes among young riders. “Young bikes are often overconfident and they are always in a hurry to get ahead ,” he says. “I believe basic traffic education must be a mandatory part of driving training.”

Sahadev Sinjali, another taxi driver, says another issue affecting road safety is the use of mobile phones and earphones while riding. “When your concentration is elsewhere while riding a vehicle, you risk yourself and others,” he says.

Shyam Kumar Subedi, who has over 15 years of motorcycle riding experience, says youths today need to understand the real impact of careless riding.

A Kathmandu-based emergency doctor warns about both physical and psychological damage from road accidents. “Some injuries can be life-threatening. Others can cause lasting mental trauma,” he says. 

He also points out how social media is promoting reckless riding. “Young people today watch dangerous motorcycle stunts and they are eager to imitate them, without proper safety gear, unaware of the risks,” he says.

Traffic police acknowledge the rising case of motorcycle accidents and say they are taking steps. They say while road safety awareness programs are being run, speed-monitoring systems have been installed, and routing traffic checks are being performed, these initiatives alone will not ensure road safety as long as the person behind the vehicle is not cautious. 

The US, under the Donald Trump administration, is steadily adopting a more aggressive stance toward China—an approach that is likely to reshape the foreign policy landscape for small South Asian countries like Nepal. Washington’s hardening posture is evident across multiple fronts: trade, technology, education and military strategy in the Indo-Pacific.

A major flashpoint has been trade. The Trump administration imposed a steep 145 percent tariff on Chinese goods—though currently paused—with expectations that the tariff war will escalate further. Simultaneously, the US State Department announced plans to revoke visas for Chinese students, especially those linked to the Chinese Communist Party or studying sensitive technologies, drawing sharp condemnation from Beijing.

The technological rivalry is already underway, but the conflict appears to be broadening. In a striking statement this week at the Shangri-La Dialogue in Singapore, US Defense Secretary Pete Hegseth declared that the United States is prepared to take a confrontational approach toward Beijing, a move that has unsettled many Asian capitals.

“As our allies share the burden, we can increase our focus on the Indo-Pacific: our priority theater,” Hegseth said. Emphasizing that the futures of the US and its Indo-Pacific allies are “bound together,” he noted that America's own security and prosperity are linked to those of its allies. “We share your vision of peace and stability, of prosperity and security, and we are here to stay,” he added.

Hegseth outlined a vision for the Indo-Pacific based on mutual interests, sovereignty and commerce—not conflict. “On this sure foundation of mutual interests and common sense, we will build and strengthen our defense partnerships to preserve peace and increase prosperity,” he stated.

Yet, he made it clear that the US will resist any attempt by China to assert dominance. “We do not seek conflict with Communist China, but we will not be pushed out of this critical region, and we will not let our allies and partners be subordinated or intimidated.” These remarks come at a time when US allies in South Asia are already facing economic strain due to the US-led trade war. The pressure is particularly acute for countries like Nepal, which have a limited maneuvering room in great-power rivalries.

Hegseth also raised alarm over China’s preparations to use force for the “unification” of Taiwan—a move he warned could trigger a global crisis. “There’s no reason to sugarcoat it: the threat China poses is real, and it could be imminent,” he said, stressing that while China’s exact intentions remain uncertain, the US and its allies must prepare with “urgency and vigilance.”

The Chinese Foreign Ministry (FM) stated on Sunday that Hegseth ignored the calls of regional countries for peace and development, promoted a Cold War mentality of bloc confrontation, smeared and attacked China, and exaggerated the "China threat theory"—remarks that were full of provocation. In fact, the US is the world's true hegemonic power and the biggest factor undermining peace and stability in the Asia-Pacific region, China said.  In order to maintain its hegemony and advance the so-called "Indo-Pacific Strategy," the US has deployed offensive weapons in the South China Sea, stoked tensions, and created instability—turning the region into a "powder keg" and arousing deep concern among regional countries, said China’s FM. 

A military conflict over Taiwan would place enormous pressure on countries like Nepal to take sides—much like the diplomatic tightrope it walked during the Russia-Ukraine war. While Nepal officially supports the one-China policy, joint statements in recent years have gone further, explicitly stating that “Nepal opposes Taiwan independence.”

Foreign policy experts warn that such language could box Nepal into supporting a future Chinese military action, compromising its neutrality. Further reinforcing this strategic posture, US Air Force Secretary Troy Meink told graduating cadets this week that the Indo-Pacific will define the military challenges of their generation. “The Indo-Pacific will be your generation’s fight, and you will deliver the most lethal force this nation has ever seen—or we will not succeed,” Meink said. He warned that the strategic competition with China is wide-ranging and unpredictable, adding, “There will be no sanctuaries.”

While the Trump administration has significantly cut development aid to countries like Nepal, it has signaled an intention to deepen defense cooperation in the region. Given Nepal’s strategic location between China and India, observers believe the US is likely to step up military engagement with Kathmandu in the coming years, further complicating Nepal’s delicate geopolitical balancing act.