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'title' => 'The West Seti Hydro Project A New Model Of People-Private-Public-Partnership?',
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</div>
<div>
<strong>--By Madhukar SJB Rana</strong></div>
<div>
</div>
<div>
For over a decade and a half, the Australian engineering company Snowy Mountain Engineering Corporation (SMEC) tried to build a 198m High Dam and generate 750 MW hydro power in the West Seti river but failed because it could not (a) mobilize the required US $ 1.2 billion funds, (b) pass the Environmental Assessment norms, (c) meet world standards for High Dams and (d) did not know – or indeed care-- how best to meet the needs of local inhabitants, both directly and indirectly affected. After 16 years of trying and having expended over $ 35 million, SMEC abandoned the project in 2011 when the Government of Nepal revoked its license once and for all.</div>
<div>
</div>
<div>
The project was a PPP project with SMEC providing 10 per cent of the power generated, or its equivalent in cash, to the Government of Nepal and exporting 90 per cent of the energy generated to India at a price of USD 4.86 per KWe under the Power Trade Agreement signed with the Power Trading Corporation (India). </div>
<div>
</div>
<div>
Under the BOOT model, the company was to transfer the ownership to Nepal after 25 years from the start of operations. In the wake of the acute power shortage in Nepal where the country has to suffer 12-14 hours of power outage in winter, it is not surprising that the people, both local and national, were opposed to such an export-oriented project. People also questioned the sheer lack of consideration for the full use of the water being damned for irrigation. </div>
<div>
</div>
<div>
Enter the China Three Gorges Corporation (CTGC), after which the West Seti Project may see the light of day. Let us hope that the CTGC takes this up as a 100 per cent FDI as it has the technology (the corporation has installed more than 20,300 MW thus far) as well as the management and financial capacity to execute it on a turnkey basis – once the selling price is settled. However, the project implementation will depend critically on issues over (a) land acquisition, (b) resettlement of the affected people,(c) construction of a transmission line to feed energy generated into the national grid and (d) learning from the mistakes of SMEC for failing to genuinely participate with the local VDC s and local communities.</div>
<div>
</div>
<div>
The project will provide immense benefits to the Far West Region comprising Baitadi, Bajhang, Doti and Dadeldhura districts – provided it is taken up as a People-Private-Public-Partnership (4Ps, not 3Ps) project where land acquisition is fairly and amicably done and the 16,000 plus people comprising 2125 plus households in the 20 VDCs get to be beneficiaries without having to be resettled elsewhere in the Tarai (Bardia, Kailali and Kanchanpur) – an ecological region totally alien to the locals’ lifestyle. In 2008, the Constituent Assembly MPs estimated that only around 20 per cent of the land is government owned and, further, that 1393 households involving 12,000 people would have to be relocated.</div>
<div>
</div>
<div>
A turnkey basis is suggested in order to get over the hassle of multiple financiers as was faced by SMEC. It may be noted here that the SMEC venture was originally to be completed in 2005.It then moved forward to 2012! Now, with the CTGC, the project is expected to be operational by 2021. The CTGC cost is estimated at around $1.7 billion. A turnkey project would free Nepal of the burden of cost over runs and delays and, more so, all manner of hidden transaction costs as payoffs to ever changing governments, politicians and bureaucrats. Should Nepal opt for federalism, the matter will be even more compounded by issues over jurisdiction and authority. Hence turnkey is the need of the hour. The next issue is under what model: BO; BOO or BOOT? How long should the contract be stipulated for? It is suggested that this be kept open depending on the PPPP project appraisal that should, ideally, seek a win-win for all stakeholders while sharing risks equitably. It needs be underscored here that China may, in the process, also come forth with a new model of development diplomacy based on the emerging concept of aid for trade.</div>
<div>
</div>
<div>
Space limits this discussion. Suffice to say that the 4th P can be incorporated by assessing the possibilities of transformation of the project area and its households by assessing possible local development opportunities over the life span of the CTGC project. The idea is simple: the area as well as the local people should benefit with the CTGC providing a new vision of social transformation, as partners, over the optimal life span of the project. This would require financial as well as economic appraisal of the project along with risk assessments and consideration of what fiscal, financial, monetary, land and infrastructure policies and programme support may be required from the local and central governments. Participatory Action Research (PAR, not simply PRA) should be engaged in to decipher the people’s wishes, desires, dreams and capacities. </div>
<div>
</div>
<div>
To conclude: ADB and Electricite de France, a French utility company, completed a 1070 MW Hydro Project in Laos where 6000 displaced villagers in 17 villages were successfully resettled into new homes along with legal grant of new plots of land and technical assistance in farming. Payments of due compensation to 18,000 villagers indirectly affected, situated in 92 villages, were provided in the form of assistance in agriculture, horticulture, fisheries, livestock, forestry and off-farm activities to include vocational and entrepreneurial skill training. Another 67 villages, lying adjacent to these 92 villages, got better access to education and health along with some cash compensation. </div>
<div>
</div>
<div>
The 4P model proposed here seeks all of the above plus more —it incorporates financial, fiscal, monetary and land acquisition terms and conditions into the model and decides on the precise nature of the partnership model-- and its duration-- only after due consideration of risks, financial and economic costs and benefits to all stakeholders. It goes way beyond the current royalty cum BOOT model that is standard fare to any and all projects which are in dire need of innovation on a case by case basis. </div>
<div>
(The Writer is a former Finance Minister and Professor at the South Asian Institute of Management.)</div>
<div>
</div>',
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'description' => 'For over a decade and a half, the Australian engineering company Snowy Mountain Engineering Corporation (SMEC) tried to build a 198m High Dam and generate 750 MW hydro power in the West Seti river but failed because it could not (a) mobilize the required US $ 1.2 billion funds, (b) pass the Environmental Assessment norms, (c) meet world standards for High Dams and (d) did not know – or indeed care-- how best to meet the needs of local inhabitants, both directly and indirectly affected. After 16 years of trying and having expended over $ 35 million, SMEC abandoned the project in 2011 when the Government of Nepal revoked its license once and for all.',
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</div>
<div>
<strong>--By Madhukar SJB Rana</strong></div>
<div>
</div>
<div>
For over a decade and a half, the Australian engineering company Snowy Mountain Engineering Corporation (SMEC) tried to build a 198m High Dam and generate 750 MW hydro power in the West Seti river but failed because it could not (a) mobilize the required US $ 1.2 billion funds, (b) pass the Environmental Assessment norms, (c) meet world standards for High Dams and (d) did not know – or indeed care-- how best to meet the needs of local inhabitants, both directly and indirectly affected. After 16 years of trying and having expended over $ 35 million, SMEC abandoned the project in 2011 when the Government of Nepal revoked its license once and for all.</div>
<div>
</div>
<div>
The project was a PPP project with SMEC providing 10 per cent of the power generated, or its equivalent in cash, to the Government of Nepal and exporting 90 per cent of the energy generated to India at a price of USD 4.86 per KWe under the Power Trade Agreement signed with the Power Trading Corporation (India). </div>
<div>
</div>
<div>
Under the BOOT model, the company was to transfer the ownership to Nepal after 25 years from the start of operations. In the wake of the acute power shortage in Nepal where the country has to suffer 12-14 hours of power outage in winter, it is not surprising that the people, both local and national, were opposed to such an export-oriented project. People also questioned the sheer lack of consideration for the full use of the water being damned for irrigation. </div>
<div>
</div>
<div>
Enter the China Three Gorges Corporation (CTGC), after which the West Seti Project may see the light of day. Let us hope that the CTGC takes this up as a 100 per cent FDI as it has the technology (the corporation has installed more than 20,300 MW thus far) as well as the management and financial capacity to execute it on a turnkey basis – once the selling price is settled. However, the project implementation will depend critically on issues over (a) land acquisition, (b) resettlement of the affected people,(c) construction of a transmission line to feed energy generated into the national grid and (d) learning from the mistakes of SMEC for failing to genuinely participate with the local VDC s and local communities.</div>
<div>
</div>
<div>
The project will provide immense benefits to the Far West Region comprising Baitadi, Bajhang, Doti and Dadeldhura districts – provided it is taken up as a People-Private-Public-Partnership (4Ps, not 3Ps) project where land acquisition is fairly and amicably done and the 16,000 plus people comprising 2125 plus households in the 20 VDCs get to be beneficiaries without having to be resettled elsewhere in the Tarai (Bardia, Kailali and Kanchanpur) – an ecological region totally alien to the locals’ lifestyle. In 2008, the Constituent Assembly MPs estimated that only around 20 per cent of the land is government owned and, further, that 1393 households involving 12,000 people would have to be relocated.</div>
<div>
</div>
<div>
A turnkey basis is suggested in order to get over the hassle of multiple financiers as was faced by SMEC. It may be noted here that the SMEC venture was originally to be completed in 2005.It then moved forward to 2012! Now, with the CTGC, the project is expected to be operational by 2021. The CTGC cost is estimated at around $1.7 billion. A turnkey project would free Nepal of the burden of cost over runs and delays and, more so, all manner of hidden transaction costs as payoffs to ever changing governments, politicians and bureaucrats. Should Nepal opt for federalism, the matter will be even more compounded by issues over jurisdiction and authority. Hence turnkey is the need of the hour. The next issue is under what model: BO; BOO or BOOT? How long should the contract be stipulated for? It is suggested that this be kept open depending on the PPPP project appraisal that should, ideally, seek a win-win for all stakeholders while sharing risks equitably. It needs be underscored here that China may, in the process, also come forth with a new model of development diplomacy based on the emerging concept of aid for trade.</div>
<div>
</div>
<div>
Space limits this discussion. Suffice to say that the 4th P can be incorporated by assessing the possibilities of transformation of the project area and its households by assessing possible local development opportunities over the life span of the CTGC project. The idea is simple: the area as well as the local people should benefit with the CTGC providing a new vision of social transformation, as partners, over the optimal life span of the project. This would require financial as well as economic appraisal of the project along with risk assessments and consideration of what fiscal, financial, monetary, land and infrastructure policies and programme support may be required from the local and central governments. Participatory Action Research (PAR, not simply PRA) should be engaged in to decipher the people’s wishes, desires, dreams and capacities. </div>
<div>
</div>
<div>
To conclude: ADB and Electricite de France, a French utility company, completed a 1070 MW Hydro Project in Laos where 6000 displaced villagers in 17 villages were successfully resettled into new homes along with legal grant of new plots of land and technical assistance in farming. Payments of due compensation to 18,000 villagers indirectly affected, situated in 92 villages, were provided in the form of assistance in agriculture, horticulture, fisheries, livestock, forestry and off-farm activities to include vocational and entrepreneurial skill training. Another 67 villages, lying adjacent to these 92 villages, got better access to education and health along with some cash compensation. </div>
<div>
</div>
<div>
The 4P model proposed here seeks all of the above plus more —it incorporates financial, fiscal, monetary and land acquisition terms and conditions into the model and decides on the precise nature of the partnership model-- and its duration-- only after due consideration of risks, financial and economic costs and benefits to all stakeholders. It goes way beyond the current royalty cum BOOT model that is standard fare to any and all projects which are in dire need of innovation on a case by case basis. </div>
<div>
(The Writer is a former Finance Minister and Professor at the South Asian Institute of Management.)</div>
<div>
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<div>
<strong>--By Madhukar SJB Rana</strong></div>
<div>
</div>
<div>
For over a decade and a half, the Australian engineering company Snowy Mountain Engineering Corporation (SMEC) tried to build a 198m High Dam and generate 750 MW hydro power in the West Seti river but failed because it could not (a) mobilize the required US $ 1.2 billion funds, (b) pass the Environmental Assessment norms, (c) meet world standards for High Dams and (d) did not know – or indeed care-- how best to meet the needs of local inhabitants, both directly and indirectly affected. After 16 years of trying and having expended over $ 35 million, SMEC abandoned the project in 2011 when the Government of Nepal revoked its license once and for all.</div>
<div>
</div>
<div>
The project was a PPP project with SMEC providing 10 per cent of the power generated, or its equivalent in cash, to the Government of Nepal and exporting 90 per cent of the energy generated to India at a price of USD 4.86 per KWe under the Power Trade Agreement signed with the Power Trading Corporation (India). </div>
<div>
</div>
<div>
Under the BOOT model, the company was to transfer the ownership to Nepal after 25 years from the start of operations. In the wake of the acute power shortage in Nepal where the country has to suffer 12-14 hours of power outage in winter, it is not surprising that the people, both local and national, were opposed to such an export-oriented project. People also questioned the sheer lack of consideration for the full use of the water being damned for irrigation. </div>
<div>
</div>
<div>
Enter the China Three Gorges Corporation (CTGC), after which the West Seti Project may see the light of day. Let us hope that the CTGC takes this up as a 100 per cent FDI as it has the technology (the corporation has installed more than 20,300 MW thus far) as well as the management and financial capacity to execute it on a turnkey basis – once the selling price is settled. However, the project implementation will depend critically on issues over (a) land acquisition, (b) resettlement of the affected people,(c) construction of a transmission line to feed energy generated into the national grid and (d) learning from the mistakes of SMEC for failing to genuinely participate with the local VDC s and local communities.</div>
<div>
</div>
<div>
The project will provide immense benefits to the Far West Region comprising Baitadi, Bajhang, Doti and Dadeldhura districts – provided it is taken up as a People-Private-Public-Partnership (4Ps, not 3Ps) project where land acquisition is fairly and amicably done and the 16,000 plus people comprising 2125 plus households in the 20 VDCs get to be beneficiaries without having to be resettled elsewhere in the Tarai (Bardia, Kailali and Kanchanpur) – an ecological region totally alien to the locals’ lifestyle. In 2008, the Constituent Assembly MPs estimated that only around 20 per cent of the land is government owned and, further, that 1393 households involving 12,000 people would have to be relocated.</div>
<div>
</div>
<div>
A turnkey basis is suggested in order to get over the hassle of multiple financiers as was faced by SMEC. It may be noted here that the SMEC venture was originally to be completed in 2005.It then moved forward to 2012! Now, with the CTGC, the project is expected to be operational by 2021. The CTGC cost is estimated at around $1.7 billion. A turnkey project would free Nepal of the burden of cost over runs and delays and, more so, all manner of hidden transaction costs as payoffs to ever changing governments, politicians and bureaucrats. Should Nepal opt for federalism, the matter will be even more compounded by issues over jurisdiction and authority. Hence turnkey is the need of the hour. The next issue is under what model: BO; BOO or BOOT? How long should the contract be stipulated for? It is suggested that this be kept open depending on the PPPP project appraisal that should, ideally, seek a win-win for all stakeholders while sharing risks equitably. It needs be underscored here that China may, in the process, also come forth with a new model of development diplomacy based on the emerging concept of aid for trade.</div>
<div>
</div>
<div>
Space limits this discussion. Suffice to say that the 4th P can be incorporated by assessing the possibilities of transformation of the project area and its households by assessing possible local development opportunities over the life span of the CTGC project. The idea is simple: the area as well as the local people should benefit with the CTGC providing a new vision of social transformation, as partners, over the optimal life span of the project. This would require financial as well as economic appraisal of the project along with risk assessments and consideration of what fiscal, financial, monetary, land and infrastructure policies and programme support may be required from the local and central governments. Participatory Action Research (PAR, not simply PRA) should be engaged in to decipher the people’s wishes, desires, dreams and capacities. </div>
<div>
</div>
<div>
To conclude: ADB and Electricite de France, a French utility company, completed a 1070 MW Hydro Project in Laos where 6000 displaced villagers in 17 villages were successfully resettled into new homes along with legal grant of new plots of land and technical assistance in farming. Payments of due compensation to 18,000 villagers indirectly affected, situated in 92 villages, were provided in the form of assistance in agriculture, horticulture, fisheries, livestock, forestry and off-farm activities to include vocational and entrepreneurial skill training. Another 67 villages, lying adjacent to these 92 villages, got better access to education and health along with some cash compensation. </div>
<div>
</div>
<div>
The 4P model proposed here seeks all of the above plus more —it incorporates financial, fiscal, monetary and land acquisition terms and conditions into the model and decides on the precise nature of the partnership model-- and its duration-- only after due consideration of risks, financial and economic costs and benefits to all stakeholders. It goes way beyond the current royalty cum BOOT model that is standard fare to any and all projects which are in dire need of innovation on a case by case basis. </div>
<div>
(The Writer is a former Finance Minister and Professor at the South Asian Institute of Management.)</div>
<div>
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<div>
<strong>--By Madhukar SJB Rana</strong></div>
<div>
</div>
<div>
For over a decade and a half, the Australian engineering company Snowy Mountain Engineering Corporation (SMEC) tried to build a 198m High Dam and generate 750 MW hydro power in the West Seti river but failed because it could not (a) mobilize the required US $ 1.2 billion funds, (b) pass the Environmental Assessment norms, (c) meet world standards for High Dams and (d) did not know – or indeed care-- how best to meet the needs of local inhabitants, both directly and indirectly affected. After 16 years of trying and having expended over $ 35 million, SMEC abandoned the project in 2011 when the Government of Nepal revoked its license once and for all.</div>
<div>
</div>
<div>
The project was a PPP project with SMEC providing 10 per cent of the power generated, or its equivalent in cash, to the Government of Nepal and exporting 90 per cent of the energy generated to India at a price of USD 4.86 per KWe under the Power Trade Agreement signed with the Power Trading Corporation (India). </div>
<div>
</div>
<div>
Under the BOOT model, the company was to transfer the ownership to Nepal after 25 years from the start of operations. In the wake of the acute power shortage in Nepal where the country has to suffer 12-14 hours of power outage in winter, it is not surprising that the people, both local and national, were opposed to such an export-oriented project. People also questioned the sheer lack of consideration for the full use of the water being damned for irrigation. </div>
<div>
</div>
<div>
Enter the China Three Gorges Corporation (CTGC), after which the West Seti Project may see the light of day. Let us hope that the CTGC takes this up as a 100 per cent FDI as it has the technology (the corporation has installed more than 20,300 MW thus far) as well as the management and financial capacity to execute it on a turnkey basis – once the selling price is settled. However, the project implementation will depend critically on issues over (a) land acquisition, (b) resettlement of the affected people,(c) construction of a transmission line to feed energy generated into the national grid and (d) learning from the mistakes of SMEC for failing to genuinely participate with the local VDC s and local communities.</div>
<div>
</div>
<div>
The project will provide immense benefits to the Far West Region comprising Baitadi, Bajhang, Doti and Dadeldhura districts – provided it is taken up as a People-Private-Public-Partnership (4Ps, not 3Ps) project where land acquisition is fairly and amicably done and the 16,000 plus people comprising 2125 plus households in the 20 VDCs get to be beneficiaries without having to be resettled elsewhere in the Tarai (Bardia, Kailali and Kanchanpur) – an ecological region totally alien to the locals’ lifestyle. In 2008, the Constituent Assembly MPs estimated that only around 20 per cent of the land is government owned and, further, that 1393 households involving 12,000 people would have to be relocated.</div>
<div>
</div>
<div>
A turnkey basis is suggested in order to get over the hassle of multiple financiers as was faced by SMEC. It may be noted here that the SMEC venture was originally to be completed in 2005.It then moved forward to 2012! Now, with the CTGC, the project is expected to be operational by 2021. The CTGC cost is estimated at around $1.7 billion. A turnkey project would free Nepal of the burden of cost over runs and delays and, more so, all manner of hidden transaction costs as payoffs to ever changing governments, politicians and bureaucrats. Should Nepal opt for federalism, the matter will be even more compounded by issues over jurisdiction and authority. Hence turnkey is the need of the hour. The next issue is under what model: BO; BOO or BOOT? How long should the contract be stipulated for? It is suggested that this be kept open depending on the PPPP project appraisal that should, ideally, seek a win-win for all stakeholders while sharing risks equitably. It needs be underscored here that China may, in the process, also come forth with a new model of development diplomacy based on the emerging concept of aid for trade.</div>
<div>
</div>
<div>
Space limits this discussion. Suffice to say that the 4th P can be incorporated by assessing the possibilities of transformation of the project area and its households by assessing possible local development opportunities over the life span of the CTGC project. The idea is simple: the area as well as the local people should benefit with the CTGC providing a new vision of social transformation, as partners, over the optimal life span of the project. This would require financial as well as economic appraisal of the project along with risk assessments and consideration of what fiscal, financial, monetary, land and infrastructure policies and programme support may be required from the local and central governments. Participatory Action Research (PAR, not simply PRA) should be engaged in to decipher the people’s wishes, desires, dreams and capacities. </div>
<div>
</div>
<div>
To conclude: ADB and Electricite de France, a French utility company, completed a 1070 MW Hydro Project in Laos where 6000 displaced villagers in 17 villages were successfully resettled into new homes along with legal grant of new plots of land and technical assistance in farming. Payments of due compensation to 18,000 villagers indirectly affected, situated in 92 villages, were provided in the form of assistance in agriculture, horticulture, fisheries, livestock, forestry and off-farm activities to include vocational and entrepreneurial skill training. Another 67 villages, lying adjacent to these 92 villages, got better access to education and health along with some cash compensation. </div>
<div>
</div>
<div>
The 4P model proposed here seeks all of the above plus more —it incorporates financial, fiscal, monetary and land acquisition terms and conditions into the model and decides on the precise nature of the partnership model-- and its duration-- only after due consideration of risks, financial and economic costs and benefits to all stakeholders. It goes way beyond the current royalty cum BOOT model that is standard fare to any and all projects which are in dire need of innovation on a case by case basis. </div>
<div>
(The Writer is a former Finance Minister and Professor at the South Asian Institute of Management.)</div>
<div>
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'description' => 'For over a decade and a half, the Australian engineering company Snowy Mountain Engineering Corporation (SMEC) tried to build a 198m High Dam and generate 750 MW hydro power in the West Seti river but failed because it could not (a) mobilize the required US $ 1.2 billion funds, (b) pass the Environmental Assessment norms, (c) meet world standards for High Dams and (d) did not know – or indeed care-- how best to meet the needs of local inhabitants, both directly and indirectly affected. After 16 years of trying and having expended over $ 35 million, SMEC abandoned the project in 2011 when the Government of Nepal revoked its license once and for all.',
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<div>
<strong>--By Madhukar SJB Rana</strong></div>
<div>
</div>
<div>
For over a decade and a half, the Australian engineering company Snowy Mountain Engineering Corporation (SMEC) tried to build a 198m High Dam and generate 750 MW hydro power in the West Seti river but failed because it could not (a) mobilize the required US $ 1.2 billion funds, (b) pass the Environmental Assessment norms, (c) meet world standards for High Dams and (d) did not know – or indeed care-- how best to meet the needs of local inhabitants, both directly and indirectly affected. After 16 years of trying and having expended over $ 35 million, SMEC abandoned the project in 2011 when the Government of Nepal revoked its license once and for all.</div>
<div>
</div>
<div>
The project was a PPP project with SMEC providing 10 per cent of the power generated, or its equivalent in cash, to the Government of Nepal and exporting 90 per cent of the energy generated to India at a price of USD 4.86 per KWe under the Power Trade Agreement signed with the Power Trading Corporation (India). </div>
<div>
</div>
<div>
Under the BOOT model, the company was to transfer the ownership to Nepal after 25 years from the start of operations. In the wake of the acute power shortage in Nepal where the country has to suffer 12-14 hours of power outage in winter, it is not surprising that the people, both local and national, were opposed to such an export-oriented project. People also questioned the sheer lack of consideration for the full use of the water being damned for irrigation. </div>
<div>
</div>
<div>
Enter the China Three Gorges Corporation (CTGC), after which the West Seti Project may see the light of day. Let us hope that the CTGC takes this up as a 100 per cent FDI as it has the technology (the corporation has installed more than 20,300 MW thus far) as well as the management and financial capacity to execute it on a turnkey basis – once the selling price is settled. However, the project implementation will depend critically on issues over (a) land acquisition, (b) resettlement of the affected people,(c) construction of a transmission line to feed energy generated into the national grid and (d) learning from the mistakes of SMEC for failing to genuinely participate with the local VDC s and local communities.</div>
<div>
</div>
<div>
The project will provide immense benefits to the Far West Region comprising Baitadi, Bajhang, Doti and Dadeldhura districts – provided it is taken up as a People-Private-Public-Partnership (4Ps, not 3Ps) project where land acquisition is fairly and amicably done and the 16,000 plus people comprising 2125 plus households in the 20 VDCs get to be beneficiaries without having to be resettled elsewhere in the Tarai (Bardia, Kailali and Kanchanpur) – an ecological region totally alien to the locals’ lifestyle. In 2008, the Constituent Assembly MPs estimated that only around 20 per cent of the land is government owned and, further, that 1393 households involving 12,000 people would have to be relocated.</div>
<div>
</div>
<div>
A turnkey basis is suggested in order to get over the hassle of multiple financiers as was faced by SMEC. It may be noted here that the SMEC venture was originally to be completed in 2005.It then moved forward to 2012! Now, with the CTGC, the project is expected to be operational by 2021. The CTGC cost is estimated at around $1.7 billion. A turnkey project would free Nepal of the burden of cost over runs and delays and, more so, all manner of hidden transaction costs as payoffs to ever changing governments, politicians and bureaucrats. Should Nepal opt for federalism, the matter will be even more compounded by issues over jurisdiction and authority. Hence turnkey is the need of the hour. The next issue is under what model: BO; BOO or BOOT? How long should the contract be stipulated for? It is suggested that this be kept open depending on the PPPP project appraisal that should, ideally, seek a win-win for all stakeholders while sharing risks equitably. It needs be underscored here that China may, in the process, also come forth with a new model of development diplomacy based on the emerging concept of aid for trade.</div>
<div>
</div>
<div>
Space limits this discussion. Suffice to say that the 4th P can be incorporated by assessing the possibilities of transformation of the project area and its households by assessing possible local development opportunities over the life span of the CTGC project. The idea is simple: the area as well as the local people should benefit with the CTGC providing a new vision of social transformation, as partners, over the optimal life span of the project. This would require financial as well as economic appraisal of the project along with risk assessments and consideration of what fiscal, financial, monetary, land and infrastructure policies and programme support may be required from the local and central governments. Participatory Action Research (PAR, not simply PRA) should be engaged in to decipher the people’s wishes, desires, dreams and capacities. </div>
<div>
</div>
<div>
To conclude: ADB and Electricite de France, a French utility company, completed a 1070 MW Hydro Project in Laos where 6000 displaced villagers in 17 villages were successfully resettled into new homes along with legal grant of new plots of land and technical assistance in farming. Payments of due compensation to 18,000 villagers indirectly affected, situated in 92 villages, were provided in the form of assistance in agriculture, horticulture, fisheries, livestock, forestry and off-farm activities to include vocational and entrepreneurial skill training. Another 67 villages, lying adjacent to these 92 villages, got better access to education and health along with some cash compensation. </div>
<div>
</div>
<div>
The 4P model proposed here seeks all of the above plus more —it incorporates financial, fiscal, monetary and land acquisition terms and conditions into the model and decides on the precise nature of the partnership model-- and its duration-- only after due consideration of risks, financial and economic costs and benefits to all stakeholders. It goes way beyond the current royalty cum BOOT model that is standard fare to any and all projects which are in dire need of innovation on a case by case basis. </div>
<div>
(The Writer is a former Finance Minister and Professor at the South Asian Institute of Management.)</div>
<div>
</div>',
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'description' => 'For over a decade and a half, the Australian engineering company Snowy Mountain Engineering Corporation (SMEC) tried to build a 198m High Dam and generate 750 MW hydro power in the West Seti river but failed because it could not (a) mobilize the required US $ 1.2 billion funds, (b) pass the Environmental Assessment norms, (c) meet world standards for High Dams and (d) did not know – or indeed care-- how best to meet the needs of local inhabitants, both directly and indirectly affected. After 16 years of trying and having expended over $ 35 million, SMEC abandoned the project in 2011 when the Government of Nepal revoked its license once and for all.',
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</div>
<div>
<strong>--By Madhukar SJB Rana</strong></div>
<div>
</div>
<div>
For over a decade and a half, the Australian engineering company Snowy Mountain Engineering Corporation (SMEC) tried to build a 198m High Dam and generate 750 MW hydro power in the West Seti river but failed because it could not (a) mobilize the required US $ 1.2 billion funds, (b) pass the Environmental Assessment norms, (c) meet world standards for High Dams and (d) did not know – or indeed care-- how best to meet the needs of local inhabitants, both directly and indirectly affected. After 16 years of trying and having expended over $ 35 million, SMEC abandoned the project in 2011 when the Government of Nepal revoked its license once and for all.</div>
<div>
</div>
<div>
The project was a PPP project with SMEC providing 10 per cent of the power generated, or its equivalent in cash, to the Government of Nepal and exporting 90 per cent of the energy generated to India at a price of USD 4.86 per KWe under the Power Trade Agreement signed with the Power Trading Corporation (India). </div>
<div>
</div>
<div>
Under the BOOT model, the company was to transfer the ownership to Nepal after 25 years from the start of operations. In the wake of the acute power shortage in Nepal where the country has to suffer 12-14 hours of power outage in winter, it is not surprising that the people, both local and national, were opposed to such an export-oriented project. People also questioned the sheer lack of consideration for the full use of the water being damned for irrigation. </div>
<div>
</div>
<div>
Enter the China Three Gorges Corporation (CTGC), after which the West Seti Project may see the light of day. Let us hope that the CTGC takes this up as a 100 per cent FDI as it has the technology (the corporation has installed more than 20,300 MW thus far) as well as the management and financial capacity to execute it on a turnkey basis – once the selling price is settled. However, the project implementation will depend critically on issues over (a) land acquisition, (b) resettlement of the affected people,(c) construction of a transmission line to feed energy generated into the national grid and (d) learning from the mistakes of SMEC for failing to genuinely participate with the local VDC s and local communities.</div>
<div>
</div>
<div>
The project will provide immense benefits to the Far West Region comprising Baitadi, Bajhang, Doti and Dadeldhura districts – provided it is taken up as a People-Private-Public-Partnership (4Ps, not 3Ps) project where land acquisition is fairly and amicably done and the 16,000 plus people comprising 2125 plus households in the 20 VDCs get to be beneficiaries without having to be resettled elsewhere in the Tarai (Bardia, Kailali and Kanchanpur) – an ecological region totally alien to the locals’ lifestyle. In 2008, the Constituent Assembly MPs estimated that only around 20 per cent of the land is government owned and, further, that 1393 households involving 12,000 people would have to be relocated.</div>
<div>
</div>
<div>
A turnkey basis is suggested in order to get over the hassle of multiple financiers as was faced by SMEC. It may be noted here that the SMEC venture was originally to be completed in 2005.It then moved forward to 2012! Now, with the CTGC, the project is expected to be operational by 2021. The CTGC cost is estimated at around $1.7 billion. A turnkey project would free Nepal of the burden of cost over runs and delays and, more so, all manner of hidden transaction costs as payoffs to ever changing governments, politicians and bureaucrats. Should Nepal opt for federalism, the matter will be even more compounded by issues over jurisdiction and authority. Hence turnkey is the need of the hour. The next issue is under what model: BO; BOO or BOOT? How long should the contract be stipulated for? It is suggested that this be kept open depending on the PPPP project appraisal that should, ideally, seek a win-win for all stakeholders while sharing risks equitably. It needs be underscored here that China may, in the process, also come forth with a new model of development diplomacy based on the emerging concept of aid for trade.</div>
<div>
</div>
<div>
Space limits this discussion. Suffice to say that the 4th P can be incorporated by assessing the possibilities of transformation of the project area and its households by assessing possible local development opportunities over the life span of the CTGC project. The idea is simple: the area as well as the local people should benefit with the CTGC providing a new vision of social transformation, as partners, over the optimal life span of the project. This would require financial as well as economic appraisal of the project along with risk assessments and consideration of what fiscal, financial, monetary, land and infrastructure policies and programme support may be required from the local and central governments. Participatory Action Research (PAR, not simply PRA) should be engaged in to decipher the people’s wishes, desires, dreams and capacities. </div>
<div>
</div>
<div>
To conclude: ADB and Electricite de France, a French utility company, completed a 1070 MW Hydro Project in Laos where 6000 displaced villagers in 17 villages were successfully resettled into new homes along with legal grant of new plots of land and technical assistance in farming. Payments of due compensation to 18,000 villagers indirectly affected, situated in 92 villages, were provided in the form of assistance in agriculture, horticulture, fisheries, livestock, forestry and off-farm activities to include vocational and entrepreneurial skill training. Another 67 villages, lying adjacent to these 92 villages, got better access to education and health along with some cash compensation. </div>
<div>
</div>
<div>
The 4P model proposed here seeks all of the above plus more —it incorporates financial, fiscal, monetary and land acquisition terms and conditions into the model and decides on the precise nature of the partnership model-- and its duration-- only after due consideration of risks, financial and economic costs and benefits to all stakeholders. It goes way beyond the current royalty cum BOOT model that is standard fare to any and all projects which are in dire need of innovation on a case by case basis. </div>
<div>
(The Writer is a former Finance Minister and Professor at the South Asian Institute of Management.)</div>
<div>
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'description' => 'For over a decade and a half, the Australian engineering company Snowy Mountain Engineering Corporation (SMEC) tried to build a 198m High Dam and generate 750 MW hydro power in the West Seti river but failed because it could not (a) mobilize the required US $ 1.2 billion funds, (b) pass the Environmental Assessment norms, (c) meet world standards for High Dams and (d) did not know – or indeed care-- how best to meet the needs of local inhabitants, both directly and indirectly affected. After 16 years of trying and having expended over $ 35 million, SMEC abandoned the project in 2011 when the Government of Nepal revoked its license once and for all.',
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The West Seti Hydro Project A New Model Of People-Private-Public-Partnership?
5 min 21 sec to read
--By Madhukar SJB Rana
For over a decade and a half, the Australian engineering company Snowy Mountain Engineering Corporation (SMEC) tried to build a 198m High Dam and generate 750 MW hydro power in the West Seti river but failed because it could not (a) mobilize the required US $ 1.2 billion funds, (b) pass the Environmental Assessment norms, (c) meet world standards for High Dams and (d) did not know – or indeed care-- how best to meet the needs of local inhabitants, both directly and indirectly affected. After 16 years of trying and having expended over $ 35 million, SMEC abandoned the project in 2011 when the Government of Nepal revoked its license once and for all.
The project was a PPP project with SMEC providing 10 per cent of the power generated, or its equivalent in cash, to the Government of Nepal and exporting 90 per cent of the energy generated to India at a price of USD 4.86 per KWe under the Power Trade Agreement signed with the Power Trading Corporation (India).
Under the BOOT model, the company was to transfer the ownership to Nepal after 25 years from the start of operations. In the wake of the acute power shortage in Nepal where the country has to suffer 12-14 hours of power outage in winter, it is not surprising that the people, both local and national, were opposed to such an export-oriented project. People also questioned the sheer lack of consideration for the full use of the water being damned for irrigation.
Enter the China Three Gorges Corporation (CTGC), after which the West Seti Project may see the light of day. Let us hope that the CTGC takes this up as a 100 per cent FDI as it has the technology (the corporation has installed more than 20,300 MW thus far) as well as the management and financial capacity to execute it on a turnkey basis – once the selling price is settled. However, the project implementation will depend critically on issues over (a) land acquisition, (b) resettlement of the affected people,(c) construction of a transmission line to feed energy generated into the national grid and (d) learning from the mistakes of SMEC for failing to genuinely participate with the local VDC s and local communities.
The project will provide immense benefits to the Far West Region comprising Baitadi, Bajhang, Doti and Dadeldhura districts – provided it is taken up as a People-Private-Public-Partnership (4Ps, not 3Ps) project where land acquisition is fairly and amicably done and the 16,000 plus people comprising 2125 plus households in the 20 VDCs get to be beneficiaries without having to be resettled elsewhere in the Tarai (Bardia, Kailali and Kanchanpur) – an ecological region totally alien to the locals’ lifestyle. In 2008, the Constituent Assembly MPs estimated that only around 20 per cent of the land is government owned and, further, that 1393 households involving 12,000 people would have to be relocated.
A turnkey basis is suggested in order to get over the hassle of multiple financiers as was faced by SMEC. It may be noted here that the SMEC venture was originally to be completed in 2005.It then moved forward to 2012! Now, with the CTGC, the project is expected to be operational by 2021. The CTGC cost is estimated at around $1.7 billion. A turnkey project would free Nepal of the burden of cost over runs and delays and, more so, all manner of hidden transaction costs as payoffs to ever changing governments, politicians and bureaucrats. Should Nepal opt for federalism, the matter will be even more compounded by issues over jurisdiction and authority. Hence turnkey is the need of the hour. The next issue is under what model: BO; BOO or BOOT? How long should the contract be stipulated for? It is suggested that this be kept open depending on the PPPP project appraisal that should, ideally, seek a win-win for all stakeholders while sharing risks equitably. It needs be underscored here that China may, in the process, also come forth with a new model of development diplomacy based on the emerging concept of aid for trade.
Space limits this discussion. Suffice to say that the 4th P can be incorporated by assessing the possibilities of transformation of the project area and its households by assessing possible local development opportunities over the life span of the CTGC project. The idea is simple: the area as well as the local people should benefit with the CTGC providing a new vision of social transformation, as partners, over the optimal life span of the project. This would require financial as well as economic appraisal of the project along with risk assessments and consideration of what fiscal, financial, monetary, land and infrastructure policies and programme support may be required from the local and central governments. Participatory Action Research (PAR, not simply PRA) should be engaged in to decipher the people’s wishes, desires, dreams and capacities.
To conclude: ADB and Electricite de France, a French utility company, completed a 1070 MW Hydro Project in Laos where 6000 displaced villagers in 17 villages were successfully resettled into new homes along with legal grant of new plots of land and technical assistance in farming. Payments of due compensation to 18,000 villagers indirectly affected, situated in 92 villages, were provided in the form of assistance in agriculture, horticulture, fisheries, livestock, forestry and off-farm activities to include vocational and entrepreneurial skill training. Another 67 villages, lying adjacent to these 92 villages, got better access to education and health along with some cash compensation.
The 4P model proposed here seeks all of the above plus more —it incorporates financial, fiscal, monetary and land acquisition terms and conditions into the model and decides on the precise nature of the partnership model-- and its duration-- only after due consideration of risks, financial and economic costs and benefits to all stakeholders. It goes way beyond the current royalty cum BOOT model that is standard fare to any and all projects which are in dire need of innovation on a case by case basis.
(The Writer is a former Finance Minister and Professor at the South Asian Institute of Management.)
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<strong>--By Madhukar SJB Rana</strong></div>
<div>
</div>
<div>
For over a decade and a half, the Australian engineering company Snowy Mountain Engineering Corporation (SMEC) tried to build a 198m High Dam and generate 750 MW hydro power in the West Seti river but failed because it could not (a) mobilize the required US $ 1.2 billion funds, (b) pass the Environmental Assessment norms, (c) meet world standards for High Dams and (d) did not know – or indeed care-- how best to meet the needs of local inhabitants, both directly and indirectly affected. After 16 years of trying and having expended over $ 35 million, SMEC abandoned the project in 2011 when the Government of Nepal revoked its license once and for all.</div>
<div>
</div>
<div>
The project was a PPP project with SMEC providing 10 per cent of the power generated, or its equivalent in cash, to the Government of Nepal and exporting 90 per cent of the energy generated to India at a price of USD 4.86 per KWe under the Power Trade Agreement signed with the Power Trading Corporation (India). </div>
<div>
</div>
<div>
Under the BOOT model, the company was to transfer the ownership to Nepal after 25 years from the start of operations. In the wake of the acute power shortage in Nepal where the country has to suffer 12-14 hours of power outage in winter, it is not surprising that the people, both local and national, were opposed to such an export-oriented project. People also questioned the sheer lack of consideration for the full use of the water being damned for irrigation. </div>
<div>
</div>
<div>
Enter the China Three Gorges Corporation (CTGC), after which the West Seti Project may see the light of day. Let us hope that the CTGC takes this up as a 100 per cent FDI as it has the technology (the corporation has installed more than 20,300 MW thus far) as well as the management and financial capacity to execute it on a turnkey basis – once the selling price is settled. However, the project implementation will depend critically on issues over (a) land acquisition, (b) resettlement of the affected people,(c) construction of a transmission line to feed energy generated into the national grid and (d) learning from the mistakes of SMEC for failing to genuinely participate with the local VDC s and local communities.</div>
<div>
</div>
<div>
The project will provide immense benefits to the Far West Region comprising Baitadi, Bajhang, Doti and Dadeldhura districts – provided it is taken up as a People-Private-Public-Partnership (4Ps, not 3Ps) project where land acquisition is fairly and amicably done and the 16,000 plus people comprising 2125 plus households in the 20 VDCs get to be beneficiaries without having to be resettled elsewhere in the Tarai (Bardia, Kailali and Kanchanpur) – an ecological region totally alien to the locals’ lifestyle. In 2008, the Constituent Assembly MPs estimated that only around 20 per cent of the land is government owned and, further, that 1393 households involving 12,000 people would have to be relocated.</div>
<div>
</div>
<div>
A turnkey basis is suggested in order to get over the hassle of multiple financiers as was faced by SMEC. It may be noted here that the SMEC venture was originally to be completed in 2005.It then moved forward to 2012! Now, with the CTGC, the project is expected to be operational by 2021. The CTGC cost is estimated at around $1.7 billion. A turnkey project would free Nepal of the burden of cost over runs and delays and, more so, all manner of hidden transaction costs as payoffs to ever changing governments, politicians and bureaucrats. Should Nepal opt for federalism, the matter will be even more compounded by issues over jurisdiction and authority. Hence turnkey is the need of the hour. The next issue is under what model: BO; BOO or BOOT? How long should the contract be stipulated for? It is suggested that this be kept open depending on the PPPP project appraisal that should, ideally, seek a win-win for all stakeholders while sharing risks equitably. It needs be underscored here that China may, in the process, also come forth with a new model of development diplomacy based on the emerging concept of aid for trade.</div>
<div>
</div>
<div>
Space limits this discussion. Suffice to say that the 4th P can be incorporated by assessing the possibilities of transformation of the project area and its households by assessing possible local development opportunities over the life span of the CTGC project. The idea is simple: the area as well as the local people should benefit with the CTGC providing a new vision of social transformation, as partners, over the optimal life span of the project. This would require financial as well as economic appraisal of the project along with risk assessments and consideration of what fiscal, financial, monetary, land and infrastructure policies and programme support may be required from the local and central governments. Participatory Action Research (PAR, not simply PRA) should be engaged in to decipher the people’s wishes, desires, dreams and capacities. </div>
<div>
</div>
<div>
To conclude: ADB and Electricite de France, a French utility company, completed a 1070 MW Hydro Project in Laos where 6000 displaced villagers in 17 villages were successfully resettled into new homes along with legal grant of new plots of land and technical assistance in farming. Payments of due compensation to 18,000 villagers indirectly affected, situated in 92 villages, were provided in the form of assistance in agriculture, horticulture, fisheries, livestock, forestry and off-farm activities to include vocational and entrepreneurial skill training. Another 67 villages, lying adjacent to these 92 villages, got better access to education and health along with some cash compensation. </div>
<div>
</div>
<div>
The 4P model proposed here seeks all of the above plus more —it incorporates financial, fiscal, monetary and land acquisition terms and conditions into the model and decides on the precise nature of the partnership model-- and its duration-- only after due consideration of risks, financial and economic costs and benefits to all stakeholders. It goes way beyond the current royalty cum BOOT model that is standard fare to any and all projects which are in dire need of innovation on a case by case basis. </div>
<div>
(The Writer is a former Finance Minister and Professor at the South Asian Institute of Management.)</div>
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<div>
<strong>--By Madhukar SJB Rana</strong></div>
<div>
</div>
<div>
For over a decade and a half, the Australian engineering company Snowy Mountain Engineering Corporation (SMEC) tried to build a 198m High Dam and generate 750 MW hydro power in the West Seti river but failed because it could not (a) mobilize the required US $ 1.2 billion funds, (b) pass the Environmental Assessment norms, (c) meet world standards for High Dams and (d) did not know – or indeed care-- how best to meet the needs of local inhabitants, both directly and indirectly affected. After 16 years of trying and having expended over $ 35 million, SMEC abandoned the project in 2011 when the Government of Nepal revoked its license once and for all.</div>
<div>
</div>
<div>
The project was a PPP project with SMEC providing 10 per cent of the power generated, or its equivalent in cash, to the Government of Nepal and exporting 90 per cent of the energy generated to India at a price of USD 4.86 per KWe under the Power Trade Agreement signed with the Power Trading Corporation (India). </div>
<div>
</div>
<div>
Under the BOOT model, the company was to transfer the ownership to Nepal after 25 years from the start of operations. In the wake of the acute power shortage in Nepal where the country has to suffer 12-14 hours of power outage in winter, it is not surprising that the people, both local and national, were opposed to such an export-oriented project. People also questioned the sheer lack of consideration for the full use of the water being damned for irrigation. </div>
<div>
</div>
<div>
Enter the China Three Gorges Corporation (CTGC), after which the West Seti Project may see the light of day. Let us hope that the CTGC takes this up as a 100 per cent FDI as it has the technology (the corporation has installed more than 20,300 MW thus far) as well as the management and financial capacity to execute it on a turnkey basis – once the selling price is settled. However, the project implementation will depend critically on issues over (a) land acquisition, (b) resettlement of the affected people,(c) construction of a transmission line to feed energy generated into the national grid and (d) learning from the mistakes of SMEC for failing to genuinely participate with the local VDC s and local communities.</div>
<div>
</div>
<div>
The project will provide immense benefits to the Far West Region comprising Baitadi, Bajhang, Doti and Dadeldhura districts – provided it is taken up as a People-Private-Public-Partnership (4Ps, not 3Ps) project where land acquisition is fairly and amicably done and the 16,000 plus people comprising 2125 plus households in the 20 VDCs get to be beneficiaries without having to be resettled elsewhere in the Tarai (Bardia, Kailali and Kanchanpur) – an ecological region totally alien to the locals’ lifestyle. In 2008, the Constituent Assembly MPs estimated that only around 20 per cent of the land is government owned and, further, that 1393 households involving 12,000 people would have to be relocated.</div>
<div>
</div>
<div>
A turnkey basis is suggested in order to get over the hassle of multiple financiers as was faced by SMEC. It may be noted here that the SMEC venture was originally to be completed in 2005.It then moved forward to 2012! Now, with the CTGC, the project is expected to be operational by 2021. The CTGC cost is estimated at around $1.7 billion. A turnkey project would free Nepal of the burden of cost over runs and delays and, more so, all manner of hidden transaction costs as payoffs to ever changing governments, politicians and bureaucrats. Should Nepal opt for federalism, the matter will be even more compounded by issues over jurisdiction and authority. Hence turnkey is the need of the hour. The next issue is under what model: BO; BOO or BOOT? How long should the contract be stipulated for? It is suggested that this be kept open depending on the PPPP project appraisal that should, ideally, seek a win-win for all stakeholders while sharing risks equitably. It needs be underscored here that China may, in the process, also come forth with a new model of development diplomacy based on the emerging concept of aid for trade.</div>
<div>
</div>
<div>
Space limits this discussion. Suffice to say that the 4th P can be incorporated by assessing the possibilities of transformation of the project area and its households by assessing possible local development opportunities over the life span of the CTGC project. The idea is simple: the area as well as the local people should benefit with the CTGC providing a new vision of social transformation, as partners, over the optimal life span of the project. This would require financial as well as economic appraisal of the project along with risk assessments and consideration of what fiscal, financial, monetary, land and infrastructure policies and programme support may be required from the local and central governments. Participatory Action Research (PAR, not simply PRA) should be engaged in to decipher the people’s wishes, desires, dreams and capacities. </div>
<div>
</div>
<div>
To conclude: ADB and Electricite de France, a French utility company, completed a 1070 MW Hydro Project in Laos where 6000 displaced villagers in 17 villages were successfully resettled into new homes along with legal grant of new plots of land and technical assistance in farming. Payments of due compensation to 18,000 villagers indirectly affected, situated in 92 villages, were provided in the form of assistance in agriculture, horticulture, fisheries, livestock, forestry and off-farm activities to include vocational and entrepreneurial skill training. Another 67 villages, lying adjacent to these 92 villages, got better access to education and health along with some cash compensation. </div>
<div>
</div>
<div>
The 4P model proposed here seeks all of the above plus more —it incorporates financial, fiscal, monetary and land acquisition terms and conditions into the model and decides on the precise nature of the partnership model-- and its duration-- only after due consideration of risks, financial and economic costs and benefits to all stakeholders. It goes way beyond the current royalty cum BOOT model that is standard fare to any and all projects which are in dire need of innovation on a case by case basis. </div>
<div>
(The Writer is a former Finance Minister and Professor at the South Asian Institute of Management.)</div>
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<strong>--By Madhukar SJB Rana</strong></div>
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For over a decade and a half, the Australian engineering company Snowy Mountain Engineering Corporation (SMEC) tried to build a 198m High Dam and generate 750 MW hydro power in the West Seti river but failed because it could not (a) mobilize the required US $ 1.2 billion funds, (b) pass the Environmental Assessment norms, (c) meet world standards for High Dams and (d) did not know – or indeed care-- how best to meet the needs of local inhabitants, both directly and indirectly affected. After 16 years of trying and having expended over $ 35 million, SMEC abandoned the project in 2011 when the Government of Nepal revoked its license once and for all.</div>
<div>
</div>
<div>
The project was a PPP project with SMEC providing 10 per cent of the power generated, or its equivalent in cash, to the Government of Nepal and exporting 90 per cent of the energy generated to India at a price of USD 4.86 per KWe under the Power Trade Agreement signed with the Power Trading Corporation (India). </div>
<div>
</div>
<div>
Under the BOOT model, the company was to transfer the ownership to Nepal after 25 years from the start of operations. In the wake of the acute power shortage in Nepal where the country has to suffer 12-14 hours of power outage in winter, it is not surprising that the people, both local and national, were opposed to such an export-oriented project. People also questioned the sheer lack of consideration for the full use of the water being damned for irrigation. </div>
<div>
</div>
<div>
Enter the China Three Gorges Corporation (CTGC), after which the West Seti Project may see the light of day. Let us hope that the CTGC takes this up as a 100 per cent FDI as it has the technology (the corporation has installed more than 20,300 MW thus far) as well as the management and financial capacity to execute it on a turnkey basis – once the selling price is settled. However, the project implementation will depend critically on issues over (a) land acquisition, (b) resettlement of the affected people,(c) construction of a transmission line to feed energy generated into the national grid and (d) learning from the mistakes of SMEC for failing to genuinely participate with the local VDC s and local communities.</div>
<div>
</div>
<div>
The project will provide immense benefits to the Far West Region comprising Baitadi, Bajhang, Doti and Dadeldhura districts – provided it is taken up as a People-Private-Public-Partnership (4Ps, not 3Ps) project where land acquisition is fairly and amicably done and the 16,000 plus people comprising 2125 plus households in the 20 VDCs get to be beneficiaries without having to be resettled elsewhere in the Tarai (Bardia, Kailali and Kanchanpur) – an ecological region totally alien to the locals’ lifestyle. In 2008, the Constituent Assembly MPs estimated that only around 20 per cent of the land is government owned and, further, that 1393 households involving 12,000 people would have to be relocated.</div>
<div>
</div>
<div>
A turnkey basis is suggested in order to get over the hassle of multiple financiers as was faced by SMEC. It may be noted here that the SMEC venture was originally to be completed in 2005.It then moved forward to 2012! Now, with the CTGC, the project is expected to be operational by 2021. The CTGC cost is estimated at around $1.7 billion. A turnkey project would free Nepal of the burden of cost over runs and delays and, more so, all manner of hidden transaction costs as payoffs to ever changing governments, politicians and bureaucrats. Should Nepal opt for federalism, the matter will be even more compounded by issues over jurisdiction and authority. Hence turnkey is the need of the hour. The next issue is under what model: BO; BOO or BOOT? How long should the contract be stipulated for? It is suggested that this be kept open depending on the PPPP project appraisal that should, ideally, seek a win-win for all stakeholders while sharing risks equitably. It needs be underscored here that China may, in the process, also come forth with a new model of development diplomacy based on the emerging concept of aid for trade.</div>
<div>
</div>
<div>
Space limits this discussion. Suffice to say that the 4th P can be incorporated by assessing the possibilities of transformation of the project area and its households by assessing possible local development opportunities over the life span of the CTGC project. The idea is simple: the area as well as the local people should benefit with the CTGC providing a new vision of social transformation, as partners, over the optimal life span of the project. This would require financial as well as economic appraisal of the project along with risk assessments and consideration of what fiscal, financial, monetary, land and infrastructure policies and programme support may be required from the local and central governments. Participatory Action Research (PAR, not simply PRA) should be engaged in to decipher the people’s wishes, desires, dreams and capacities. </div>
<div>
</div>
<div>
To conclude: ADB and Electricite de France, a French utility company, completed a 1070 MW Hydro Project in Laos where 6000 displaced villagers in 17 villages were successfully resettled into new homes along with legal grant of new plots of land and technical assistance in farming. Payments of due compensation to 18,000 villagers indirectly affected, situated in 92 villages, were provided in the form of assistance in agriculture, horticulture, fisheries, livestock, forestry and off-farm activities to include vocational and entrepreneurial skill training. Another 67 villages, lying adjacent to these 92 villages, got better access to education and health along with some cash compensation. </div>
<div>
</div>
<div>
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<div>
(The Writer is a former Finance Minister and Professor at the South Asian Institute of Management.)</div>
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'title' => 'The West Seti Hydro Project A New Model Of People-Private-Public-Partnership?',
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</div>
<div>
<strong>--By Madhukar SJB Rana</strong></div>
<div>
</div>
<div>
For over a decade and a half, the Australian engineering company Snowy Mountain Engineering Corporation (SMEC) tried to build a 198m High Dam and generate 750 MW hydro power in the West Seti river but failed because it could not (a) mobilize the required US $ 1.2 billion funds, (b) pass the Environmental Assessment norms, (c) meet world standards for High Dams and (d) did not know – or indeed care-- how best to meet the needs of local inhabitants, both directly and indirectly affected. After 16 years of trying and having expended over $ 35 million, SMEC abandoned the project in 2011 when the Government of Nepal revoked its license once and for all.</div>
<div>
</div>
<div>
The project was a PPP project with SMEC providing 10 per cent of the power generated, or its equivalent in cash, to the Government of Nepal and exporting 90 per cent of the energy generated to India at a price of USD 4.86 per KWe under the Power Trade Agreement signed with the Power Trading Corporation (India). </div>
<div>
</div>
<div>
Under the BOOT model, the company was to transfer the ownership to Nepal after 25 years from the start of operations. In the wake of the acute power shortage in Nepal where the country has to suffer 12-14 hours of power outage in winter, it is not surprising that the people, both local and national, were opposed to such an export-oriented project. People also questioned the sheer lack of consideration for the full use of the water being damned for irrigation. </div>
<div>
</div>
<div>
Enter the China Three Gorges Corporation (CTGC), after which the West Seti Project may see the light of day. Let us hope that the CTGC takes this up as a 100 per cent FDI as it has the technology (the corporation has installed more than 20,300 MW thus far) as well as the management and financial capacity to execute it on a turnkey basis – once the selling price is settled. However, the project implementation will depend critically on issues over (a) land acquisition, (b) resettlement of the affected people,(c) construction of a transmission line to feed energy generated into the national grid and (d) learning from the mistakes of SMEC for failing to genuinely participate with the local VDC s and local communities.</div>
<div>
</div>
<div>
The project will provide immense benefits to the Far West Region comprising Baitadi, Bajhang, Doti and Dadeldhura districts – provided it is taken up as a People-Private-Public-Partnership (4Ps, not 3Ps) project where land acquisition is fairly and amicably done and the 16,000 plus people comprising 2125 plus households in the 20 VDCs get to be beneficiaries without having to be resettled elsewhere in the Tarai (Bardia, Kailali and Kanchanpur) – an ecological region totally alien to the locals’ lifestyle. In 2008, the Constituent Assembly MPs estimated that only around 20 per cent of the land is government owned and, further, that 1393 households involving 12,000 people would have to be relocated.</div>
<div>
</div>
<div>
A turnkey basis is suggested in order to get over the hassle of multiple financiers as was faced by SMEC. It may be noted here that the SMEC venture was originally to be completed in 2005.It then moved forward to 2012! Now, with the CTGC, the project is expected to be operational by 2021. The CTGC cost is estimated at around $1.7 billion. A turnkey project would free Nepal of the burden of cost over runs and delays and, more so, all manner of hidden transaction costs as payoffs to ever changing governments, politicians and bureaucrats. Should Nepal opt for federalism, the matter will be even more compounded by issues over jurisdiction and authority. Hence turnkey is the need of the hour. The next issue is under what model: BO; BOO or BOOT? How long should the contract be stipulated for? It is suggested that this be kept open depending on the PPPP project appraisal that should, ideally, seek a win-win for all stakeholders while sharing risks equitably. It needs be underscored here that China may, in the process, also come forth with a new model of development diplomacy based on the emerging concept of aid for trade.</div>
<div>
</div>
<div>
Space limits this discussion. Suffice to say that the 4th P can be incorporated by assessing the possibilities of transformation of the project area and its households by assessing possible local development opportunities over the life span of the CTGC project. The idea is simple: the area as well as the local people should benefit with the CTGC providing a new vision of social transformation, as partners, over the optimal life span of the project. This would require financial as well as economic appraisal of the project along with risk assessments and consideration of what fiscal, financial, monetary, land and infrastructure policies and programme support may be required from the local and central governments. Participatory Action Research (PAR, not simply PRA) should be engaged in to decipher the people’s wishes, desires, dreams and capacities. </div>
<div>
</div>
<div>
To conclude: ADB and Electricite de France, a French utility company, completed a 1070 MW Hydro Project in Laos where 6000 displaced villagers in 17 villages were successfully resettled into new homes along with legal grant of new plots of land and technical assistance in farming. Payments of due compensation to 18,000 villagers indirectly affected, situated in 92 villages, were provided in the form of assistance in agriculture, horticulture, fisheries, livestock, forestry and off-farm activities to include vocational and entrepreneurial skill training. Another 67 villages, lying adjacent to these 92 villages, got better access to education and health along with some cash compensation. </div>
<div>
</div>
<div>
The 4P model proposed here seeks all of the above plus more —it incorporates financial, fiscal, monetary and land acquisition terms and conditions into the model and decides on the precise nature of the partnership model-- and its duration-- only after due consideration of risks, financial and economic costs and benefits to all stakeholders. It goes way beyond the current royalty cum BOOT model that is standard fare to any and all projects which are in dire need of innovation on a case by case basis. </div>
<div>
(The Writer is a former Finance Minister and Professor at the South Asian Institute of Management.)</div>
<div>
</div>',
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</div>
<div>
<strong>--By Madhukar SJB Rana</strong></div>
<div>
</div>
<div>
For over a decade and a half, the Australian engineering company Snowy Mountain Engineering Corporation (SMEC) tried to build a 198m High Dam and generate 750 MW hydro power in the West Seti river but failed because it could not (a) mobilize the required US $ 1.2 billion funds, (b) pass the Environmental Assessment norms, (c) meet world standards for High Dams and (d) did not know – or indeed care-- how best to meet the needs of local inhabitants, both directly and indirectly affected. After 16 years of trying and having expended over $ 35 million, SMEC abandoned the project in 2011 when the Government of Nepal revoked its license once and for all.</div>
<div>
</div>
<div>
The project was a PPP project with SMEC providing 10 per cent of the power generated, or its equivalent in cash, to the Government of Nepal and exporting 90 per cent of the energy generated to India at a price of USD 4.86 per KWe under the Power Trade Agreement signed with the Power Trading Corporation (India). </div>
<div>
</div>
<div>
Under the BOOT model, the company was to transfer the ownership to Nepal after 25 years from the start of operations. In the wake of the acute power shortage in Nepal where the country has to suffer 12-14 hours of power outage in winter, it is not surprising that the people, both local and national, were opposed to such an export-oriented project. People also questioned the sheer lack of consideration for the full use of the water being damned for irrigation. </div>
<div>
</div>
<div>
Enter the China Three Gorges Corporation (CTGC), after which the West Seti Project may see the light of day. Let us hope that the CTGC takes this up as a 100 per cent FDI as it has the technology (the corporation has installed more than 20,300 MW thus far) as well as the management and financial capacity to execute it on a turnkey basis – once the selling price is settled. However, the project implementation will depend critically on issues over (a) land acquisition, (b) resettlement of the affected people,(c) construction of a transmission line to feed energy generated into the national grid and (d) learning from the mistakes of SMEC for failing to genuinely participate with the local VDC s and local communities.</div>
<div>
</div>
<div>
The project will provide immense benefits to the Far West Region comprising Baitadi, Bajhang, Doti and Dadeldhura districts – provided it is taken up as a People-Private-Public-Partnership (4Ps, not 3Ps) project where land acquisition is fairly and amicably done and the 16,000 plus people comprising 2125 plus households in the 20 VDCs get to be beneficiaries without having to be resettled elsewhere in the Tarai (Bardia, Kailali and Kanchanpur) – an ecological region totally alien to the locals’ lifestyle. In 2008, the Constituent Assembly MPs estimated that only around 20 per cent of the land is government owned and, further, that 1393 households involving 12,000 people would have to be relocated.</div>
<div>
</div>
<div>
A turnkey basis is suggested in order to get over the hassle of multiple financiers as was faced by SMEC. It may be noted here that the SMEC venture was originally to be completed in 2005.It then moved forward to 2012! Now, with the CTGC, the project is expected to be operational by 2021. The CTGC cost is estimated at around $1.7 billion. A turnkey project would free Nepal of the burden of cost over runs and delays and, more so, all manner of hidden transaction costs as payoffs to ever changing governments, politicians and bureaucrats. Should Nepal opt for federalism, the matter will be even more compounded by issues over jurisdiction and authority. Hence turnkey is the need of the hour. The next issue is under what model: BO; BOO or BOOT? How long should the contract be stipulated for? It is suggested that this be kept open depending on the PPPP project appraisal that should, ideally, seek a win-win for all stakeholders while sharing risks equitably. It needs be underscored here that China may, in the process, also come forth with a new model of development diplomacy based on the emerging concept of aid for trade.</div>
<div>
</div>
<div>
Space limits this discussion. Suffice to say that the 4th P can be incorporated by assessing the possibilities of transformation of the project area and its households by assessing possible local development opportunities over the life span of the CTGC project. The idea is simple: the area as well as the local people should benefit with the CTGC providing a new vision of social transformation, as partners, over the optimal life span of the project. This would require financial as well as economic appraisal of the project along with risk assessments and consideration of what fiscal, financial, monetary, land and infrastructure policies and programme support may be required from the local and central governments. Participatory Action Research (PAR, not simply PRA) should be engaged in to decipher the people’s wishes, desires, dreams and capacities. </div>
<div>
</div>
<div>
To conclude: ADB and Electricite de France, a French utility company, completed a 1070 MW Hydro Project in Laos where 6000 displaced villagers in 17 villages were successfully resettled into new homes along with legal grant of new plots of land and technical assistance in farming. Payments of due compensation to 18,000 villagers indirectly affected, situated in 92 villages, were provided in the form of assistance in agriculture, horticulture, fisheries, livestock, forestry and off-farm activities to include vocational and entrepreneurial skill training. Another 67 villages, lying adjacent to these 92 villages, got better access to education and health along with some cash compensation. </div>
<div>
</div>
<div>
The 4P model proposed here seeks all of the above plus more —it incorporates financial, fiscal, monetary and land acquisition terms and conditions into the model and decides on the precise nature of the partnership model-- and its duration-- only after due consideration of risks, financial and economic costs and benefits to all stakeholders. It goes way beyond the current royalty cum BOOT model that is standard fare to any and all projects which are in dire need of innovation on a case by case basis. </div>
<div>
(The Writer is a former Finance Minister and Professor at the South Asian Institute of Management.)</div>
<div>
</div>',
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'description' => 'For over a decade and a half, the Australian engineering company Snowy Mountain Engineering Corporation (SMEC) tried to build a 198m High Dam and generate 750 MW hydro power in the West Seti river but failed because it could not (a) mobilize the required US $ 1.2 billion funds, (b) pass the Environmental Assessment norms, (c) meet world standards for High Dams and (d) did not know – or indeed care-- how best to meet the needs of local inhabitants, both directly and indirectly affected. After 16 years of trying and having expended over $ 35 million, SMEC abandoned the project in 2011 when the Government of Nepal revoked its license once and for all.',
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<div>
<strong>--By Madhukar SJB Rana</strong></div>
<div>
</div>
<div>
For over a decade and a half, the Australian engineering company Snowy Mountain Engineering Corporation (SMEC) tried to build a 198m High Dam and generate 750 MW hydro power in the West Seti river but failed because it could not (a) mobilize the required US $ 1.2 billion funds, (b) pass the Environmental Assessment norms, (c) meet world standards for High Dams and (d) did not know – or indeed care-- how best to meet the needs of local inhabitants, both directly and indirectly affected. After 16 years of trying and having expended over $ 35 million, SMEC abandoned the project in 2011 when the Government of Nepal revoked its license once and for all.</div>
<div>
</div>
<div>
The project was a PPP project with SMEC providing 10 per cent of the power generated, or its equivalent in cash, to the Government of Nepal and exporting 90 per cent of the energy generated to India at a price of USD 4.86 per KWe under the Power Trade Agreement signed with the Power Trading Corporation (India). </div>
<div>
</div>
<div>
Under the BOOT model, the company was to transfer the ownership to Nepal after 25 years from the start of operations. In the wake of the acute power shortage in Nepal where the country has to suffer 12-14 hours of power outage in winter, it is not surprising that the people, both local and national, were opposed to such an export-oriented project. People also questioned the sheer lack of consideration for the full use of the water being damned for irrigation. </div>
<div>
</div>
<div>
Enter the China Three Gorges Corporation (CTGC), after which the West Seti Project may see the light of day. Let us hope that the CTGC takes this up as a 100 per cent FDI as it has the technology (the corporation has installed more than 20,300 MW thus far) as well as the management and financial capacity to execute it on a turnkey basis – once the selling price is settled. However, the project implementation will depend critically on issues over (a) land acquisition, (b) resettlement of the affected people,(c) construction of a transmission line to feed energy generated into the national grid and (d) learning from the mistakes of SMEC for failing to genuinely participate with the local VDC s and local communities.</div>
<div>
</div>
<div>
The project will provide immense benefits to the Far West Region comprising Baitadi, Bajhang, Doti and Dadeldhura districts – provided it is taken up as a People-Private-Public-Partnership (4Ps, not 3Ps) project where land acquisition is fairly and amicably done and the 16,000 plus people comprising 2125 plus households in the 20 VDCs get to be beneficiaries without having to be resettled elsewhere in the Tarai (Bardia, Kailali and Kanchanpur) – an ecological region totally alien to the locals’ lifestyle. In 2008, the Constituent Assembly MPs estimated that only around 20 per cent of the land is government owned and, further, that 1393 households involving 12,000 people would have to be relocated.</div>
<div>
</div>
<div>
A turnkey basis is suggested in order to get over the hassle of multiple financiers as was faced by SMEC. It may be noted here that the SMEC venture was originally to be completed in 2005.It then moved forward to 2012! Now, with the CTGC, the project is expected to be operational by 2021. The CTGC cost is estimated at around $1.7 billion. A turnkey project would free Nepal of the burden of cost over runs and delays and, more so, all manner of hidden transaction costs as payoffs to ever changing governments, politicians and bureaucrats. Should Nepal opt for federalism, the matter will be even more compounded by issues over jurisdiction and authority. Hence turnkey is the need of the hour. The next issue is under what model: BO; BOO or BOOT? How long should the contract be stipulated for? It is suggested that this be kept open depending on the PPPP project appraisal that should, ideally, seek a win-win for all stakeholders while sharing risks equitably. It needs be underscored here that China may, in the process, also come forth with a new model of development diplomacy based on the emerging concept of aid for trade.</div>
<div>
</div>
<div>
Space limits this discussion. Suffice to say that the 4th P can be incorporated by assessing the possibilities of transformation of the project area and its households by assessing possible local development opportunities over the life span of the CTGC project. The idea is simple: the area as well as the local people should benefit with the CTGC providing a new vision of social transformation, as partners, over the optimal life span of the project. This would require financial as well as economic appraisal of the project along with risk assessments and consideration of what fiscal, financial, monetary, land and infrastructure policies and programme support may be required from the local and central governments. Participatory Action Research (PAR, not simply PRA) should be engaged in to decipher the people’s wishes, desires, dreams and capacities. </div>
<div>
</div>
<div>
To conclude: ADB and Electricite de France, a French utility company, completed a 1070 MW Hydro Project in Laos where 6000 displaced villagers in 17 villages were successfully resettled into new homes along with legal grant of new plots of land and technical assistance in farming. Payments of due compensation to 18,000 villagers indirectly affected, situated in 92 villages, were provided in the form of assistance in agriculture, horticulture, fisheries, livestock, forestry and off-farm activities to include vocational and entrepreneurial skill training. Another 67 villages, lying adjacent to these 92 villages, got better access to education and health along with some cash compensation. </div>
<div>
</div>
<div>
The 4P model proposed here seeks all of the above plus more —it incorporates financial, fiscal, monetary and land acquisition terms and conditions into the model and decides on the precise nature of the partnership model-- and its duration-- only after due consideration of risks, financial and economic costs and benefits to all stakeholders. It goes way beyond the current royalty cum BOOT model that is standard fare to any and all projects which are in dire need of innovation on a case by case basis. </div>
<div>
(The Writer is a former Finance Minister and Professor at the South Asian Institute of Management.)</div>
<div>
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For over a decade and a half, the Australian engineering company Snowy Mountain Engineering Corporation (SMEC) tried to build a 198m High Dam and generate 750 MW hydro power in the West Seti river but failed because it could not (a) mobilize the required US $ 1.2 billion funds, (b) pass the Environmental Assessment norms, (c) meet world standards for High Dams and (d) did not know – or indeed care-- how best to meet the needs of local inhabitants, both directly and indirectly affected. After 16 years of trying and having expended over $ 35 million, SMEC abandoned the project in 2011 when the Government of Nepal revoked its license once and for all.</div>
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</div>
<div>
The project was a PPP project with SMEC providing 10 per cent of the power generated, or its equivalent in cash, to the Government of Nepal and exporting 90 per cent of the energy generated to India at a price of USD 4.86 per KWe under the Power Trade Agreement signed with the Power Trading Corporation (India). </div>
<div>
</div>
<div>
Under the BOOT model, the company was to transfer the ownership to Nepal after 25 years from the start of operations. In the wake of the acute power shortage in Nepal where the country has to suffer 12-14 hours of power outage in winter, it is not surprising that the people, both local and national, were opposed to such an export-oriented project. People also questioned the sheer lack of consideration for the full use of the water being damned for irrigation. </div>
<div>
</div>
<div>
Enter the China Three Gorges Corporation (CTGC), after which the West Seti Project may see the light of day. Let us hope that the CTGC takes this up as a 100 per cent FDI as it has the technology (the corporation has installed more than 20,300 MW thus far) as well as the management and financial capacity to execute it on a turnkey basis – once the selling price is settled. However, the project implementation will depend critically on issues over (a) land acquisition, (b) resettlement of the affected people,(c) construction of a transmission line to feed energy generated into the national grid and (d) learning from the mistakes of SMEC for failing to genuinely participate with the local VDC s and local communities.</div>
<div>
</div>
<div>
The project will provide immense benefits to the Far West Region comprising Baitadi, Bajhang, Doti and Dadeldhura districts – provided it is taken up as a People-Private-Public-Partnership (4Ps, not 3Ps) project where land acquisition is fairly and amicably done and the 16,000 plus people comprising 2125 plus households in the 20 VDCs get to be beneficiaries without having to be resettled elsewhere in the Tarai (Bardia, Kailali and Kanchanpur) – an ecological region totally alien to the locals’ lifestyle. In 2008, the Constituent Assembly MPs estimated that only around 20 per cent of the land is government owned and, further, that 1393 households involving 12,000 people would have to be relocated.</div>
<div>
</div>
<div>
A turnkey basis is suggested in order to get over the hassle of multiple financiers as was faced by SMEC. It may be noted here that the SMEC venture was originally to be completed in 2005.It then moved forward to 2012! Now, with the CTGC, the project is expected to be operational by 2021. The CTGC cost is estimated at around $1.7 billion. A turnkey project would free Nepal of the burden of cost over runs and delays and, more so, all manner of hidden transaction costs as payoffs to ever changing governments, politicians and bureaucrats. Should Nepal opt for federalism, the matter will be even more compounded by issues over jurisdiction and authority. Hence turnkey is the need of the hour. The next issue is under what model: BO; BOO or BOOT? How long should the contract be stipulated for? It is suggested that this be kept open depending on the PPPP project appraisal that should, ideally, seek a win-win for all stakeholders while sharing risks equitably. It needs be underscored here that China may, in the process, also come forth with a new model of development diplomacy based on the emerging concept of aid for trade.</div>
<div>
</div>
<div>
Space limits this discussion. Suffice to say that the 4th P can be incorporated by assessing the possibilities of transformation of the project area and its households by assessing possible local development opportunities over the life span of the CTGC project. The idea is simple: the area as well as the local people should benefit with the CTGC providing a new vision of social transformation, as partners, over the optimal life span of the project. This would require financial as well as economic appraisal of the project along with risk assessments and consideration of what fiscal, financial, monetary, land and infrastructure policies and programme support may be required from the local and central governments. Participatory Action Research (PAR, not simply PRA) should be engaged in to decipher the people’s wishes, desires, dreams and capacities. </div>
<div>
</div>
<div>
To conclude: ADB and Electricite de France, a French utility company, completed a 1070 MW Hydro Project in Laos where 6000 displaced villagers in 17 villages were successfully resettled into new homes along with legal grant of new plots of land and technical assistance in farming. Payments of due compensation to 18,000 villagers indirectly affected, situated in 92 villages, were provided in the form of assistance in agriculture, horticulture, fisheries, livestock, forestry and off-farm activities to include vocational and entrepreneurial skill training. Another 67 villages, lying adjacent to these 92 villages, got better access to education and health along with some cash compensation. </div>
<div>
</div>
<div>
The 4P model proposed here seeks all of the above plus more —it incorporates financial, fiscal, monetary and land acquisition terms and conditions into the model and decides on the precise nature of the partnership model-- and its duration-- only after due consideration of risks, financial and economic costs and benefits to all stakeholders. It goes way beyond the current royalty cum BOOT model that is standard fare to any and all projects which are in dire need of innovation on a case by case basis. </div>
<div>
(The Writer is a former Finance Minister and Professor at the South Asian Institute of Management.)</div>
<div>
</div>',
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'description' => 'For over a decade and a half, the Australian engineering company Snowy Mountain Engineering Corporation (SMEC) tried to build a 198m High Dam and generate 750 MW hydro power in the West Seti river but failed because it could not (a) mobilize the required US $ 1.2 billion funds, (b) pass the Environmental Assessment norms, (c) meet world standards for High Dams and (d) did not know – or indeed care-- how best to meet the needs of local inhabitants, both directly and indirectly affected. After 16 years of trying and having expended over $ 35 million, SMEC abandoned the project in 2011 when the Government of Nepal revoked its license once and for all.',
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'title' => 'The West Seti Hydro Project A New Model Of People-Private-Public-Partnership?',
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</div>
<div>
<strong>--By Madhukar SJB Rana</strong></div>
<div>
</div>
<div>
For over a decade and a half, the Australian engineering company Snowy Mountain Engineering Corporation (SMEC) tried to build a 198m High Dam and generate 750 MW hydro power in the West Seti river but failed because it could not (a) mobilize the required US $ 1.2 billion funds, (b) pass the Environmental Assessment norms, (c) meet world standards for High Dams and (d) did not know – or indeed care-- how best to meet the needs of local inhabitants, both directly and indirectly affected. After 16 years of trying and having expended over $ 35 million, SMEC abandoned the project in 2011 when the Government of Nepal revoked its license once and for all.</div>
<div>
</div>
<div>
The project was a PPP project with SMEC providing 10 per cent of the power generated, or its equivalent in cash, to the Government of Nepal and exporting 90 per cent of the energy generated to India at a price of USD 4.86 per KWe under the Power Trade Agreement signed with the Power Trading Corporation (India). </div>
<div>
</div>
<div>
Under the BOOT model, the company was to transfer the ownership to Nepal after 25 years from the start of operations. In the wake of the acute power shortage in Nepal where the country has to suffer 12-14 hours of power outage in winter, it is not surprising that the people, both local and national, were opposed to such an export-oriented project. People also questioned the sheer lack of consideration for the full use of the water being damned for irrigation. </div>
<div>
</div>
<div>
Enter the China Three Gorges Corporation (CTGC), after which the West Seti Project may see the light of day. Let us hope that the CTGC takes this up as a 100 per cent FDI as it has the technology (the corporation has installed more than 20,300 MW thus far) as well as the management and financial capacity to execute it on a turnkey basis – once the selling price is settled. However, the project implementation will depend critically on issues over (a) land acquisition, (b) resettlement of the affected people,(c) construction of a transmission line to feed energy generated into the national grid and (d) learning from the mistakes of SMEC for failing to genuinely participate with the local VDC s and local communities.</div>
<div>
</div>
<div>
The project will provide immense benefits to the Far West Region comprising Baitadi, Bajhang, Doti and Dadeldhura districts – provided it is taken up as a People-Private-Public-Partnership (4Ps, not 3Ps) project where land acquisition is fairly and amicably done and the 16,000 plus people comprising 2125 plus households in the 20 VDCs get to be beneficiaries without having to be resettled elsewhere in the Tarai (Bardia, Kailali and Kanchanpur) – an ecological region totally alien to the locals’ lifestyle. In 2008, the Constituent Assembly MPs estimated that only around 20 per cent of the land is government owned and, further, that 1393 households involving 12,000 people would have to be relocated.</div>
<div>
</div>
<div>
A turnkey basis is suggested in order to get over the hassle of multiple financiers as was faced by SMEC. It may be noted here that the SMEC venture was originally to be completed in 2005.It then moved forward to 2012! Now, with the CTGC, the project is expected to be operational by 2021. The CTGC cost is estimated at around $1.7 billion. A turnkey project would free Nepal of the burden of cost over runs and delays and, more so, all manner of hidden transaction costs as payoffs to ever changing governments, politicians and bureaucrats. Should Nepal opt for federalism, the matter will be even more compounded by issues over jurisdiction and authority. Hence turnkey is the need of the hour. The next issue is under what model: BO; BOO or BOOT? How long should the contract be stipulated for? It is suggested that this be kept open depending on the PPPP project appraisal that should, ideally, seek a win-win for all stakeholders while sharing risks equitably. It needs be underscored here that China may, in the process, also come forth with a new model of development diplomacy based on the emerging concept of aid for trade.</div>
<div>
</div>
<div>
Space limits this discussion. Suffice to say that the 4th P can be incorporated by assessing the possibilities of transformation of the project area and its households by assessing possible local development opportunities over the life span of the CTGC project. The idea is simple: the area as well as the local people should benefit with the CTGC providing a new vision of social transformation, as partners, over the optimal life span of the project. This would require financial as well as economic appraisal of the project along with risk assessments and consideration of what fiscal, financial, monetary, land and infrastructure policies and programme support may be required from the local and central governments. Participatory Action Research (PAR, not simply PRA) should be engaged in to decipher the people’s wishes, desires, dreams and capacities. </div>
<div>
</div>
<div>
To conclude: ADB and Electricite de France, a French utility company, completed a 1070 MW Hydro Project in Laos where 6000 displaced villagers in 17 villages were successfully resettled into new homes along with legal grant of new plots of land and technical assistance in farming. Payments of due compensation to 18,000 villagers indirectly affected, situated in 92 villages, were provided in the form of assistance in agriculture, horticulture, fisheries, livestock, forestry and off-farm activities to include vocational and entrepreneurial skill training. Another 67 villages, lying adjacent to these 92 villages, got better access to education and health along with some cash compensation. </div>
<div>
</div>
<div>
The 4P model proposed here seeks all of the above plus more —it incorporates financial, fiscal, monetary and land acquisition terms and conditions into the model and decides on the precise nature of the partnership model-- and its duration-- only after due consideration of risks, financial and economic costs and benefits to all stakeholders. It goes way beyond the current royalty cum BOOT model that is standard fare to any and all projects which are in dire need of innovation on a case by case basis. </div>
<div>
(The Writer is a former Finance Minister and Professor at the South Asian Institute of Management.)</div>
<div>
</div>',
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