The protracted progress of West Seti Hydroelectric Project in absence of financial arrangement is again taking a move ahead.

One of the senior project officials informed to start 10 km long access road, connecting project’s site and Seti Highway, to encourage the investors. “To trim down the project’s uncertainty existing among locals, government and investors, we are constructing access road with investment from SMEC,” the official told the Rajdhani.

According to an official at the Ministry of Energy, the promoter, which failed to kick-start the construction works even after a decade of acquiring the project’s license, is going to construct access road in the project’s site when the government started looking for a new investor.

The Energy Minister, Prakash Sharan Mahat informed that the project could not go ahead since the company failed to make financial closing. “The government is not going to delay the project if the construction company approaches us with an official letter regarding financial closure,” he said.

The Minister Mahat admitted the continuity of the same company in the project, although he hinted some preliminary discussions regarding the new investor. “We are analysing some clauses for amendment in the agreement with the existing company,” he said. 

Mahat also informed that the agreement was forwarded to officials at Ministry of Finance and Ministry of Law for giving a second look at some clauses.

Nepal bears a great loss since the construction company failed to make financial arrangement, said Mahat, “The government is committed to begin West Seti soon.”

The project with 750 MW installed capacity exports 90 percent of electricity to India while remaining 10 percent will be granted to Nepal free of cost.

As per the past agreement, 1.6 billion US dollars project engrosses share investment from Australian Construction Company SMEC (26 %), Government of Nepal (15%), Asian Development Bank (15%), China Machinery Imports and Exports Corporation CMEC (15%), Infrastructure Leasing and Financial Services –IL&FS (15%) and the Nepalese financial institutions (14 %) including four percent from the far western local people. The project will have 25 percent equity share and 75 percent as loan investment.

“Investments from others will flow as soon as ADB gets ready,” said the source accusing ADB for its negligence for delayed investment.

Unofficial translation from Rajdhani daily Kathmandu, Nov 17, 2009

KATHMANDU: It takes 73 days to fulfil six procedures to get an electricity connection in Nepal, according to a World Bank pilot project. The same can be done in 22 days and four procedures in Iceland but takes 424 days in Afghanistan.

Getting Electricity — the two-and-a-half-year project — presents findings on the constraints entrepreneurs around the world face in getting access to electricity and illustrates patterns in connection processes. The study also tracks all the procedures, the time, and the cost required to obtain an electricity connection for a newly constructed building.

However, in Nepal the cost of not having electricity is higher than the cost of connection, as the country reels under long hours of power outage. World Bank surveys in 89 economies of the world show that electricity tops infrastructure needs of the business entities.

Many businesses lack access to power connections and are prevented from moving into higher-value-added activities that rely on electricity-based technologies. According to International Energy Agency, in 2005 more than a quarter of the world’s population lacked access to electricity. Businesses also care about the cost of both the electricity connection and the electricity supply-because electricity-related expenditure eats up a significant share of their revenue.

Managers responding to World Bank Enterprise Surveys estimated that on average their spending on electricity amounts to four per cent of their annual sales, while combined spending on other infrastructure services like fuel, communication services and water accounts for 6.4 per cent.

Among the 140 economies surveyed for Getting Electricity, Ukraine ranks at the bottom, with 10 procedures required to get new power connection. It’s much easier to do the same in Denmark, Germany, Japan and Mauritius.

The survey details the efficiency and cost of the services provided to commercial customers by distribution utilities, the complexity of procedures, and the resources expended by businesses in obtaining a connection.

“In the 10 economies with fewest procedures, the process of obtaining an electricity connection takes only 56 days on an average, while in 10 economies with most procedures, it takes 215 days,” the report adds.

The Himalayan Times