Panel identifies potential sources to fund construction of Budhigandaki
A committee led by Vice Chairman of National Planning Commission Swarnim Wagle has submitted a report to Deputy Prime Minister and Minister for Energy Kamal Thapa with potential sources for the required resource to develop the 1,200-megawatt Buidhigandaki reservoir project.
Located in the Gorkha and Dhading districts, near from the major load centres of the country — Kathmandu, Chitwan and Pokhara — the report submitted today says Nepal could generate enough resources over the next 10 years to cover the cost of construction of the mega project.
The government has been levying petroleum tax of five rupees in sales of each litre of petrol from last fiscal to distribute land compensation to the affected locals of project site and the process of compensation distribution has already begun.
The committee’s report has said that the government could generate around Rs 140 to 160 billion from the petroleum tax over 10 years if the consumption of the petroleum products increases by 10 to 12 per cent over the next decade.
Likewise, NEA as a developer could chip in equity investment worth Rs 10 billion to Rs 20 billion in the project. The Employees Provident Fund could make reinvestment ranging between Rs 30 billion to Rs 50 billion in next 10 years akin to its investment in Upper Tamakoshi, Sanjen, Bhotekoshi, among others. Similarly, Citizen Investment Trust (Rs 30 to 40 billion), Nepal Telecom (Rs 15 to 20 billion), Beema Sansthan and insurance companies (Rs 10 to 20 billion) could also chip in resources over the next 10 years.
Hydropower Investment and Development Company, Upper Tamakoshi Hydroelectric Company could make investment of at least Rs 10 billion during the construction period of the Budhigandaki project, as per the report.
The report has also envisioned mobilising Rs three to five billion from Chilime Hydropower Company, Rs five to seven billion from the welfare funds of Nepal Police and Nepal Army and Rs 10 to 20 billion from the public (including migrant workers).
Thus, the country could easily mobilise Rs 270 to 367 billion over the next 10 years to develop the project, which is listed as a national pride project.
According to a study carried out in 2013 by a French company — Tractebel Engineering (France) —the cost of developing the Budhigandaki project is expected to be around Rs 260 billion.
The previous government led by Pushpa Kamal Dahal had handpicked a Chinese Company — China Gezhouba Group Corporation (CGGC) — and handed over the project to be built as per engineering, procurement, construction and financing (EPCF) contract. After the deal landed in controversy, House panels — Finance Committee and Agriculture, Water Resource Committee — instructed the government to scrap the contract.
Later, Deputy Prime Minister and Minister for Energy Thapa, of the incumbent Sher Bahadur Deuba-led government, scrapped the deal with the Chinese company and decided to hand over the project to Nepal Electricity Authority (NEA) in November, ahead of the parliamentary and provincial assembly polls.
Back then, Deputy PM Thapa had formed the committee led by NPC Vice Chairman Wagle. Governor of the Nepal Rastra Bank, finance secretary, joint secretary at Ministry of Energy and executive director of the NEA were members of the committee.
However, the Left alliance, which comprises major political parties CPN-UML and Maoists Centre — had announced earlier that the project would be handed over to the same Chinese company again, when the Left alliance comes to power.