Nepal Electricity Authority (NEA) had formed a committee headed by its board member Lekhman Singh Bhandary a month ago to assess the financial and technical capability of the five proposing companies. The committee is preparing financial and technical indicators to analyse these proposals.

“We are preparing criteria to select a company for the project,” said Bhandary.

The NEA’s next board meeting will endorse the criteria set by the committee. Bhandary said that 15 days after the endorsement of the criteria, the company that offers the project’s maximum shares to the NEA will be awarded the project.

The government had included Budhi Gandaki along with Upper Karnali (300 MW) and Arun III (402 MW) hydropower projects for international bidding three years ago. Two Chinese companies had submitted proposals to commission the project then.

“However, the Chinese companies failed to meet the criteria set by the former Finance Secretary Bhanu Prasad Acharya-led committee to commission the project,” said Bhandary. Offer of maximum shares to the NEA will be a major criterion for the selection of the company, added Bhandary.  Although internationally acclaimed company Electricity De France (EDF) had proposed public-private partnership (PPP) model for the project two years ago, the government took no decision then. Four other Indian companies had also submitted proposals for the project.

The 1983 pre-feasibility study estimated that this reservoir-type project could be commissioned at a cost of US $ 800 million.

The Kathmandu Post

जिल्लाको मध्य क्षेत्रमा पर्ने हगाम गाविसको गेलुङखोलाबाट गेलुङखोला हाइड्रोपावर कम्पनी लिमिटेडले ३ हजार ३ सय ५० किलोवाट क्षमताको विद्युत् आयोजनाको निर्माणकार्य शुरू गरेको हो।

बरम्ची गाविसको ढाँडेदेखि हगामको पाटीचौरसम्मको १९ किलोमिटर प्रवेश मार्गको निर्माण कार्य २ करोड रुपियाँ लागतमा शुरू भइसकेको कार्यकारी निर्देशक पूर्णबहादुर श्रेष्ठले जानकारी दिनुभयो।

अरनिको राजमार्गको बलेफीदेखि ढाँडेसम्म दैनिक यात्रुबस सञ्चालन भइरहेकाले प्रवेश मार्ग निर्माण गर्न थप लगानी गर्नुनपर्ने हुँदा आयोजनाबाट उत्पादित विद्युत् सस्तो पर्ने बताइएको छ। प्रवेशमार्गको निर्माणकार्य २ महिनाभित्र सम्पन्न गर्ने लक्ष्य लिएको छ।

र्सार्वजनिक सुनुवाइसमेत भइसकेको सो आयोजनाको कुल लगानी ४६ करोड रुपियाँ लाग्ने अध्ययनले देखाएको छ। आयोजनाले स्वदेशी बैंकसँग ऋण लिने प्रक्रिया अघि बढाएको छ।

आयोजनाबाट जिल्लाबासीलाई ४० प्रतिशत शेयर वितरण गर्नुका साथै कामदारलाई अनिवार्य रूपमा १ सय कित्ता शेयर लिनुपर्ने व्यवस्था गर्न लागेको श्रेष्ठले बताउनुभयो।

आयोजनास्थलदेखि लामोसाँगुसम्मको १९ किलोमिटर प्रसारण लाइन निर्माण गर्नुपर्ने र सोका लागि बरम्चीस्थित युनिक हाइड्रोपावर कम्पनीसँग संयुक्त रूपमा निर्माण गरिने भएको छ।

बरम्ची साना जलविद्युत् आयोजनमा भइरहेको ९ सय ८० किलोवाटलाई ४ दशमलव ३ मेगावाट स्तरोन्नतिको काम धमाधम भइरहेको छ। जिल्लामा यो समेत कुल ७ वटा आयोजनाबाट विद्युत् उत्पादनको काम भइरहेको छ। जसबाट कुल ८८ मेगावाट विद्युत् उत्पादन हुने अनुमान गरिएको छ।

Nepal Samacharpatra

During a meeting held between Energy Minister Prakash Sharan Mahat and Isabel Guerreo, World Bank Vice President for South Asian Region, on Sunday, the ministry put forward the proposal for investment in Upper Arun project.

In September 2009, the WB had asked the government to come up with potential hydropower projects that could help minimise power crisis in the country, expressing willingness to invest in the potential projects.

“I have proposed Upper Arun to WB for investment after consulting with other concerned experts,” said Mahat. “We will hold detailed discussion on the proposal next week.”

Meanwhile, a press statement issued by the Ministry of Energy after the meeting, said the WB has shown commitment for investment on big hydropower projects in the country to address the existing power outage.  Minister Mahat said the total power generated from Upper Arun will be utilised in the country. “The government will also invest certain amount for this project,” he said.

The estimated cost of the Upper Arun project located some 10 kilometres away from Nepal-China border in Sankhuwasabha district is around US $480 million, according to a study carried out in 1990. The first feasibility study of the project was conducted in 1987, while the detailed project study completed in 1991.

The Kathmandu Post

Government’s nature conservation efforts are impeding hydropower generation. On Dec. 4, 2009, the Cabinet meeting held in Kalapatthar had decided to expand the Bardia National Park from 968 sq. km. to 1862 sq. km.

The highaltitude meet aimed at drawing global attention towards melting Himalayas saw declaration of the Gaurishanker Conservation Area. It covers 2035 sq. km. of land and straddles Dolakha, Ramechhap and Sindupalchowk districts. The BNP expansion and the Gaurishanker conservation area are likely to affect prospects for a dozen hydropower projects, including the 45-MW Bheri-Babai Multi Purpose Project and 456-MW Upper Tamakoshi Hydro Power Project (UTHEP), an official at the Ministry of Energy (MoE) said.

The BNP expansion, the official said, will affect the execution of a 45-MW project, which can irrigate thousands of hectares in Bardia. In 1987, then Ministry of Water Resources had conducted a study on the project that was designed to generate 183 MW and irrigate thousands of hectares in Bardia by diverting Bheri waters into the Babai.

With the birth of the BNP in 1988, the site for the proposed powerhouse came under the protected area and had to be shifted. Thanks to the change of site, the project, even if it is executed, will generate only 45 MW, according to the official. There are other environmental concerns that delay hydel projects. The UTHEP is a case in point. Work on the project got delayed as authorities, including the Ministry of Forests and Soil Conservation (MoFSC), did not issue permission on time for felling trees on the project site.

According to the Department of National Parks and Wildlife Conservation (DNPWC) Act, the Ministry of Environment, MoFSC and the National Planning Commission should approve the Environment Assessment Impact (EIA) for the execution of development projects inside protected areas.

The Act has it that any hydropower project based in a protected area should use only 50 percent of total water resources available, take permission for use of explosives during construction and felling trees. Apart from that, project officials must pay entry fee each time they visit the site under the protected area. “The MoFSC did not coordinate with the MoE before declaring conservation areas,” according to Secretary at the MŒ Shanker Prasad Koirala.

A proposed 10-MW reservoir project located inside the Langtang National Park had to be scrapped five years ago as the park did not issue permission for the project’s execution, said Koirala.

However, spokesperson for the Department of National Parks and Wildlife Conservation Shiva Raj Bhatta said executing UTHEP would not be difficult as the Langtang park is “more flexible” compared to other national parks and reserves.

Source: The Kathmandu Post

Nepal has started to import 20 megawatt of electricity through the Tanakapur point beginning January 1 as per the agreement between Nepal Electricity Authority (NEA) and the Power Trade Corporation (PTC) of India .

The NEA has said that the supply will be up to Lamahi. “The 20 MW power has been supplied to the western part of Nepal up to Lamahi,” Dr Jibendra Jha, the Managing Director of NEA, told myrepublica.com on Saturday.

The rate per unit of the imported power from the West Bengal state of India is a whopping Rs 10.72 (IRs 6.70).

The Systems Department of NEA has said that there will, however, be no significant difference in loadshedding hours in West Nepal even after the import.

“The existing two hours loadshedding will continue,” Sher Singh Bhat said.

The NEA is now trying to negotiate an import of another 30 MW from India to lessen the loadshedding burden facing the country. The additional power will be imported at the same rate from West Bengal .

“If we get power from West Bengal the price will remain the same, but if we bring it from Bihar the price may go down,” Jha said.

However, NEA sources indicate that there is “very low possibility” of importing power from Bihar as the state is itself facing an acute shortage of electricity.

Of the 60 MW request originally made by NEA (some two months back), the Indian side has already denied 30 MW supply. Thus the negotiation now is only for the remaining 30 MW.

Similarly, the Indian side also turned down the government´s request for a 100 MW power at concessional rate. The request was made during Prime Minister Madhav Kumar Nepal´s India visit.

Ministerial-level talks uncertain

Meanwhile, the ministerial-level water talk, which was scheduled to be held in January, has become uncertain. The meeting of Joint Ministerial-level Commission on Water Resources (JMCWR) to be held this month in Delhi was finalized during the Joint-Committee on Water Resources (JCWR) meeting in Pokhara in November. “We still haven´t finalized the date for the meeting,” Dr Prakash Sharan Mahat told myrepublica.com.

The Indian embassy in Kathmandu has, however, said that the delay has been caused as Nepal is yet to hold the Joint-Standing Technical Committee (JSTC) meeting in Kathmandu as per the understanding reached during JCWR meeting.

“We will hold the JMCWR after Nepal holds the JSTC meeting,” Apoorva Srivastava, the spokesperson of the embassy, told myrepublica.com.

The JSTC is a quarterly meeting and was last held in December in Delhi . Nepal did not hold the JSTC in March.

Source: Republica

Minister for Energy Dr Prakash Sharan Mahat has said the government is working to limit power outage to 12 hours per day this winter. Last year consumers had faced power outage up to 20 hours a day during the driest season.

The total demand in the country reaches nearly 900 MW while the installed capacity of all the hydroelectric projects doesn´t make up even 700 MW. Moreover, the projects generate less than half their full [installed] capacity during the dry season as all — except for Kulekhani — hydro-projects are built on run-of-river model.

At a meeting of the Parliamentary Committee on Natural Resources and Means on Sunday, the minister said the government is planning to import 60 MW from India through Nawalparasi and Biratnagar points and repair the existing thermal plants in Biratnagar and Hetauda to reduce the power outage hours.

However, according to Nepal Electricity Authority (NEA), of the 60 MW request originally made by the NEA (some two months back), the Indian side has already denied 30 MW supply. Thus the negotiation is only for the remaining 30 MW.

The government has started to import 20 MW through the Tanakapur point from January 1 as per the agreement between NEA and the Power Trade Corporation (PTC) of India . The NEA will distribute the electricity imported through Tanakpur to districts in farwestern Nepal .

On the thermal plant front, the government every year announces that it will repair the plants and generate electricity in full capacity but failed to keep the promise. The two thermal plants have total capacity of 50MW but they are generating only 20 MW. “We are taking initiatives for repairing and generating electricity in full capacity from there as well,” Mahat told lawmakers.

Electricity leakage 85 percent in Bara

Saying that one of the major problems is power leakage and power theft by the public, he sought support from the parliamentarians to tackle the problem.

The minister said that the government had been failing in its efforts to upgrade and repair transmission lines due to locals´ obstruction at several places including in the capital itself.

“We have found that electricity theft is rampant. Power leakage in Bara district is 85 percent. Likewise, Bhaktapur, Chitwan, Kapilvastu and Saptari are some other districts where leakages are very high,” Mahat said.

According to the NEA, electricity loss in the transmission, combining theft by consumers and technical losses, is up to 27 percent of the total generation.

Govt bodies owe NEA Rs 1.71b in electricity bills

The government offices and local bodies — municipalities, district development committees and village development committees — owe the NEA Rs 1.71 billion in electricity bills. The government offices have dues worth Rs 650 million while the local bodies have yet to clear electricity bills worth Rs. 1.06 billion.

“I urge the government bodies to clear the bills. Otherwise, it will send a wrong message and encourage consumers to default on electricity bills,” he said.

Source: Republica

It is our common experience that this decade has witnessed an unprecedented oil price hike and simmering crisis of food commodities simultaneously. Diversion of massive quantities of staple food commodities from human consumption to biofuel production, increased cost of production, and adverse weather and climatic conditions in major cereal grain producing countries are the oft-cited reasons for the food price hike. Even though some people accuse biofuels of contributing to a rise in food prices, the food-fuel nexus is a complicated issue, hence the role of biofuel policies in food price hikes has become a contentious issue of the day.

Today, top biofuel producers like the United States and Brazil use food crops to make it. The rapid increase in ethanol production from food crops, especially corn and sugarcane, has posed a number of impacts on grain supply and demand systems. FAO data indicates that in 2007, about 23 percent of the coarse grain produced in the United States and 54 percent of sugarcane produced in Brazil was used as feedstock for ethanol production. Similarly, the EU nations diverted 47 percent of vegetable oil for biodiesel production, and in turn imported vegetable oil for human consumption (FAO, 2008).

Increased demand for corn from the ethanol industry has increased corn prices in the international market, and has encouraged farmers to bring more area under corn cultivation. On the other hand, rising corn prices have shifted consumer demands towards rice and wheat, whereas farmers are prompted to shift from rice and wheat to maize cultivation. These demand and supply side effects have thus increased the price of major food crops, not only of corn.

Rosegrant (2008) found that during the period 2000 to 2007, increased biofuel demand contributed to a 30 percent rise in weighted average grain prices. Given the continued higher oil prices, he predicts that the global corn price will be pushed up by 20 percent by 2010 and 41 percent by 2020. The poorest parts of sub-Saharan Africa and Latin America will be hard hit because the price of their staple crop — cassava — is expected to increase by 33 percent by 2010 and 135 percent by 2020.

What if non-edible and secondary crops are used for biofuel production? Countries like Brazil, Indonesia and Malaysia are relying on soybean and palm for meeting the feedstock demand. Similarly, the government of India has recently embarked on an ambitious mission of Jatropha plantation for biodiesel production. Simply speaking, if growing biofuel crops doesn’t compete with the land currently allocated for the production of food grains, biofuel will have minimal impact on food security. Otherwise, the impact would be almost the same as using cereal grains for biofuel production.

During the period 1990 to 2002, the area under palm oil and soy cultivation increased by 43 and 26 percent respectively. This was brought about by massive tropical deforestation. Indonesia witnessed approximately 2 million hectares of tropical deforestation for palm oil plantation in 1999. Similarly, Brazil lost vast areas of forest for palm oil and soy plantation. In addition, oil palm and soy companies have been blamed for devastating forest fires. For example, in 1997-98, about 15 million hectares of forests were lost in Indonesia and Brazil by forest fire for soy and palm cultivation. Besides this, human suffering and displacement of people from forests and native title lands are other uncovered and hidden stories of palm oil plantation in Indonesia.

So, what appears from the scrutiny of the available literature is that biofuels could potentially threaten food security and the environment. In addition, biofuel could potentially compete with agriculture for water. The Consultative Group on International Agricultural Research (CGIAR) has stated that the ambitious biofuel production targets of India and China could worsen the water scarcity situation in the whole South Asian region and compete with food production.

The biofuel issue has been one of the less discussed and most attractive “projects” in Nepal today. Most NGOs, INGOs and donors have a biofuel component in their strategic and programme documents. At the same time, it is also true that most of them do not have any systematic analyses that form the justification for their intervention. So, what appears from the reality is that development agencies are trying to fantasise about the issue rather than being responsive to the needs of the people. It seems as if they are trying to “jump” into the biofuel pond without stripping off their clothes and without ascertaining the depth of the pond. Even though there are some (I must say very scant) media reports showing Jatropha oil being used in automotive propelling, no one would find any systematic and scientific study on the basis of which they can claim that biofuel will really be a worthy investment of the day. There hasn’t been any “scientific study” undertaken in Nepal so far pertaining to the costs and benefits associated with promoting biofuel.

The other important actor, the government, appears like a mute spectator. As far as I understand, there isn’t any official government view on whether or not biofuel is the needed intervention of the day. The Nepal government doesn’t even have any bio-diesel and ethanol blending targets. So it is quite surprising and strange to see biofuel projects operating in a policy and factual vacuum. It appears as if INGOs and NGOs are busy playing their own drums, and the government is performing a tuneless dance.

What is most important today is to have a coherent government policy on biofuel that defines the scale of intervention and the role of actors in the sector. By scale, I mean everyone should be clear on whether biofuel should be produced on a commercial basis (especially for the locomotive purpose) or simply to fulfil local-level energy demand (for example, crushing Jatropha seeds and using it to light lamps and run pump sets). Until and unless we have a precise policy instrument and analysis of the associated costs and benefits, the project efforts will remain largely futile, and it would be nothing more than building castles in the air.

The writer can be reached to comment at  dmkandel@yahoo.com

Source:  The Kathmandu Post

As per the Nepalese constitution, the Mahakali Treaty had to be endorsed by the parliament. Accordingly, when it was introduced, it was passed by over two thirds majority of the parliament members in 1996.

In Nepal’s history, the signing of the Mahakali Treaty in 1996 was perhaps the only occasion when Nepal had demonstrated rare boldness to move  forward towards economic nationalism. All the major political parties in Nepal
including the Nepali Congress, CPN-UML, Rastriya Prajatantra Party and Nepal Sadbhavana Party supported the Treaty as they all found it in Nepal’s best interest.

Moreover, the CPN-UML was fractured when certain factions within the party could not reconcile with the stand of the party in regard to Mahakali Treaty. But the important thing was that the party did not give up its stand to demonstrate its solidarity with other political parties in supporting the Treaty. It was not a small event that a national political party like CPN-UML remained firm on the issue of the Treaty at the cost of party division.

Even the media, intelligentsia, academicians, civil society groups and political activists from various political parties are on record to have supported the Mahakali deal. The opposition to the Treaty was only from a few both within and outside the parliament.

What was there in the Mahakali Treaty that united most of the Nepalese and political forces together? Under the Treaty provision, the Pancheshwar Multipurpose Project was to be constructed on the stretch of Mahakali, the boundary river between Nepal and India as there was provision for equal entitlement in the utilization of the waters. As per the Treaty, Nepal and India agreed to “have equal entitlement in the utilization of the waters of the Mahakali River without prejudice to their respective existing consumptive uses of the waters of the Mahakali River.”

Besides, the Treaty was based on the principle that the cost of the project would be borne by the respective countries on the basis of benefits in the form of irrigation and flood control. Section 3 of Article 3 of the Treaty clearly stipulated that the “cost of the Project shall be borne by the Parties in proportion to the benefits accruing to them.”

Because of the above provisions, Nepal made a claim for 8,000 cusecs of water in the Mahakali river out of the total excess water of 16,000 cusecs. Of the 8,000 cusecs of water in Nepal’s share, the maximum that country could use was 4,000 cusecs to irrigate the entire 930,000 hectares of land of Kailali and Kanchanpur districts. In such a case, Nepal made a provision to allow India to use the extra 4,000 cusecs of water with the condition that it would have to seek fewer loans and India would have to invest more amounts in the project, which many believe was in Nepal’s national interest.

With a view to implementing the Project, the two countries agreed to jointly prepare the Detailed Project Report (DPR) within six months. But nothing tangible developed during the last 13 years until Nepal and India signed a pact recently to set up Pancheshwor Development Authority (PDA). It is this body that is expected to commission the Pancheshwor Multipurpose Project, which is the most important factor in the Treaty.

Ostensibly, the above breakthrough was made in regard to the Mahakali Treaty due to more accommodative provisions of Nepali concerns as compared to any of the past such agreements with India. India has agreed to establish PDA office in Nepal’s Mahendranagar and not in any other place in India. Besides, the Chief Executive Officer for the PDA would be selected through open competition from among Nepali and Indian candidates. There would also be equal number of staff in PDA from both these countries.

Though late, it is at the most opportune time that Nepal and India have realized that they need to do something tangible towards harnessing water resources from Mahakali river for the integrated development of hydropower, irrigation and flood control. It is likely that the project would help produce six times more power for Nepal alone than what the country is producing today. With the access of so much of power, Nepal’s agricultural, industrial, service and other sectors are likely to get life-blood. We would no more be a country begging for power. We would rather be one that could bargain even with strength if at all we decide in future to sell the extra power.

Dr. Jha is Professor of Economics & Executive Director, CETSSource: The Himalayan Times

The Supreme Court had, on Dec. 17, had issued a verdict, directing the government to manage the groundwater situation by regulating and restricting the operation of private water tanker operators. The verdict had urged the government to make necessary arrangements prohibiting the extraction of valley’s groundwater beyond a certain limit.

Read more from Ekantipur

Kathmandu residents will now face a loadshedding of up to eight hours within few days. Nepal Electricity Authority (NEA) has said that the loadshedding in the valley may rise anywhere between six to eight hours within the next few days. However, the systems department of NEA has yet to work out a new loadshedding schedule.

“Situation is not good, so we will have to increase the power cut timing for sure,” Sher Singh Bhat, Director of Systems Operation Department at NEA, said.

He added that the decision to this effect will be taken on Tuesday as NEA is currently working out detail of the demand and supply to increase the loadshedding.

The Ministry of Energy sources, on the other hand, told myrepublica.com on Sunday that loadshedding will reach eight hours at least by the end of the week as per NEA´s own plan. “NEA is now looking at seven to eight hours, not just six,” a ministry source said on condition of anonymity.

As per the NEA´s monthly load-shedding projection for the winter brought out earlier last month, the projection for the month of Poush was seven hours. The NEA officials have thus said that the need for increase in loadshedding is as per the projection and the ongoing demand.

The increase in loadshedding hours will also be contingent upon import of additional power from India . As per the initial plan, Nepal was to import 125 MW of additional power from India , especially from the West Bengal state of India , as Bihar state is itself facing an acute shortage of electricity supply. A price of IRs 8 per unit was fixed for the same. But now even the price has gone up.

“Power from India can no longer be bought now at IRs 8, it has gone up to IRs 12 to 13,” the ministry source said, adding, “NEA is still negotiating the price.”

With the government´s plan to put in place a new thermal plant from Germany in limbo, and its plan to upgrade the existing thermal plants in the country and generate 25 MW more from them also uncertain, the loadshedding in the driest month may now be more than 12 hours a day by the driest month beginning Chaitra.
 
The Rising Nepal