Banks and Promoters at Loggerheads over Property Evaluation: Governor

Governor of the Nepal Rastra Bank Dr Yuba Raj Khatiwada said that the banks and the promoters of hydropower projects are playing blame game with each other. While addressing the Power Summit, Khatiwada said, “The banks say that the promoters tend to inflate the equity amount of the projects, while the promoters blame the banks for under evaluating the asset while financing their projects.” Shedding light on the risk aversion issue in the hydropower sector investment, he advised both the parties to build confidence rather blaming each other for the problem. The central bank governor also opined that the project developers should include the risk of exchange rates in the project analysis and financial appraisal instead of seeking risk guarantee from the government on foreign investment.

 

Strike at Upper Madi Hydropower Project

Nearly 90 Nepali workers went on a strike at Upper Madi-hydropower at Sildujure in Kaski after their demand for pay as per the international labour organizations went on deaf ears. Most of the protesters include drivers, operators, labourers, and welders. Vice-chairperson of Workers’ Committee’s Guna Prasad Baral said, “We were forced to take this decision after the contractor did not pay any heed to their twenty-point demand that we put forth.” Their demands include reduction of duty hours, over-time allowance, Dashain bonus and work place security, among others. Later a meeting between the agitating parties and the management committee was held but it ended inconclusively. “There is no work environment at the construction site. No allowance or other facilities are provided to drivers. We have to wear the same pair of shoes, that don’t last even for 15 days, for more than six months and we don’t even have a toilet,” Baral said. Meanwhile, Pas Bahadur Bastola, undersecretary of stakeholder’s committee expressed solidarity with the workers’ agitation. As many as 100 Chinese nationals are working in the project. The hydro project, with a capacity of 25 MW, was initiated with the joint investment of Chinese Three Georges and Nepal’s private sector. It had started on December 29 in 2012 with completion time of 28 months. The estimated cost of the project is Rs 5.28 billion and it was supposed to be completed by April 2015.

 

Exploring Possibilities in Hydro Sector

The politicians participating in the power summit 2013 threw support for “integration of power markets” of Nepal, China and India “for the benefit of everyone in the region”. Although Nepal is said to have a potential of producing 83,000MW of hydroelectricity from its rivers, the country so far has been able to tap less than 800MW of that. As a result, hours-long power outage has become a norm in the country, which is affecting production at various industries and hindering country’s economic development. “Water resources need to be exploited to achieve higher growth rates. If we cannot do this the country’s dream of graduating to the grouping of developing nations, will only remains a pipe dream,” said Radhesh Pant, CEO of the Investment Board, which oversees implementation hydro projects of over 500MW, among others.