Himal International Energy Pvt. Limited (HIEPL) has acquired majority shares in the Bhote Koshi Power Company (BKPC) Pvt. Ltd.—a leading Independent Power Producer (IPP) of the country.

BKPC operates the 36 MW Bhote Koshi hydropower plant located in Sindhupalchok district.

HIEPL now holds the shares of Panda of Nepal, owned by Panda Global Holdings, a Dallas based Energy Company and MCNIC, owned by DTE Energy. Both companies are divesting as per their strategy of exiting out of all global businesses and concentrating on the US domestic energy markets, said a statement issued by the Company.

HIEPL now owns 85 percent of the equity in the BKPC—up from just 10 percent earlier. IFC continues to hold 10 percent stakes in the company while Harza Engineering Corp.—a US based company—continues to retain its 5 percent equity.

Addressing a press meet organised in Lalitpur on Monday, Siddhartha Rana, new chairman of BKPC, said, “This has been a project close to my heart.” “Nepal’s potential in energy sector has been greatly talked about in the past. This is a major step towards our future endeavors in energy business.”

Responding to a query, Rana said foreign investment is a key benchmark of a country’s investment environment. “The safe and hassle free exist of one of the largest investments in Nepal exemplifies that Nepal is a very safe place for foreign investment,” he added.

Former chairman of the Hotel Soaltee Ltd., Mr. Rana said HIEPL had plans to own 51 percent of the stake in BKPC in future and float remaining shares with it to the general public. “We are utilizing national resource (water) and utilizing land (both govt. and public owned). So, it is not only the matter of corporate responsibility, but also a social contract to engage common people in our endeavours,” said Rana.

He further said that HIEPL will set up a Trust to help development activities in ten VDCs of Sindhupalchowk district. “A year ago, we had completely Nepalised the operations. Today, the entire plant and all operations are run most efficiently by the Nepalis,” he added. Mr. Rana said 25 other Nepali investors had also joined in the project now.

Sujeev Shakya, newly appointed President of the company, said it was wrong to say that hydropower plants constructed by the IPPs were costly. “Private sector developers have to pay the interest, insurance, legal and contracting costs which a government entity doesn’t have to. So, it is the question of whether we should have (relatively) costly power or no power at all,” he added.

Mr. Shakya informed that share transactions worth USD 22 million had taken place while purchasing equity from the US investors by the HIEPL. He said the BKPC had entered into the Power Purchase Agreement (PPA) with the state-owned Nepal Electricity Authority (NEA) in US currency and that its debt also was in US dollars and Euro.

According to Shakya, total project cost of the Bhote Koshi hydro power project stood at 98 million dollars out of which 29 million USD was in the form of equity while the rest was in the form of debt. As per the agreement, the developers will hand over the plant to the government after 25 years.

General Manager of the BKPC, Dr. Sandip Shah, said the state-owned Nepal Electricity Authority (NEA) still owed nearly 5.3 million dollars to BKPC in dues. He said Nepal had to face load-shedding since there was no sustained investment in the hydro-power sector in the country.

Speaking on the occasion, John Zamlen, authorized representative of the outgoing foreign partners Panda and MCNIC said, “This share transfer nicely fits the future business strategies of all the parties involved. It is truly a “win –win” milestone that had always been envisioned and that now has become a reality.”

Himal Xia of International Finance Corporation (IFC) said, “The transfer of majority ownership of BKPC from the original foreign partners to the local partner is a positive and timely development for Nepal. IFC is pleased to be associated with this project and strongly supports this transaction.” IFC and DEG-German Investment and Development Company, are the lead lenders.

Sujit Mundul, CEO of Standard Chartered Bank Nepal, said it was the beginning of a new era of acquisition finance in Nepal. Standard Chartered were Financial advisors and lead arrangers of acquisition finance on this deal.

At a time when the employees of the Nepal Electricity Authority (NEA) have been rallying against the government’s plan to disintegrate the authority and start its privatisation process, experts have also stressed that involvement of private sector in hydropower sector would be helpful in meeting the increasing demand of power.

Addressing an interaction programme organised by Research and Media Centre against Corruption (ReMAC) in the capital on Monday, Dr Bholanath Chalise, said competition among the private producers would increase the generation of more electricity at cheaper cost and help reduce the present rate of load shedding.

The increasing rate of electricity consumption cannot not be met unless the NEA involves private sector for power production and take immediate initiation to build new plants, he said. Present increment rate of consumption, which is around 8 percent, would reach 10 percent by 2008, Chalise predicted.

He blamed that the ongoing daily load shedding was the result of the government’s failure to start newer plants soon after the completion of one.

Director of Butwal Power Company, Gyanendra Pradhan, said over-ambitious projects of NEA investing more money than projected and delays in completion are the major causes of load shedding. The NEA, according to him, should allow the national private companies to set up smaller plants so that the problem of load shedding in rural areas could be minimised while the NEA could divert the power from big plants to towns and industrial cities.

“The NEA should focus more on fulfilling the demands in major cities and building big plants while leaving the private sector to invest in smaller plants,” he maintained.

Chairman of Chilime Hydro Power Limited, Dambar Nepali, stressed that the government should prioritize the investment from national companies in the hydropower sector that can produce electricity at least up to 60MW electricity. He also criticized the government’s decision to withhold licenses of 22 national power companies that would have already built plants had they been granted permission.

He also urged the NEA to repair the national transmission grid so that the power produced by the private hydro power plants could reach consumers easily. “For years the NEA has not repaired the national grid that has been a major cause of electricity leakage,” he pointed out.

Executive Director of Arun Valley Hydropower Development Company Limited, Guru Prasad Neupane, said one of the causes of load shedding was the NEA’s failure to operate its existing plants at their fullest capacity. He said that six projected plants in Koshi zone have not been able to start construction due to government’s delay in giving license to them. “These plants could prove to be relief to the people of that region,” he said.

Speaking at the program, executive chairman of Gautam Buddha Hydropower Limited, Hari Bairagi Dahal, said that the problem of power shortage would not be solved unless the government realises the seriousness of the problem. “The state has not recognised load shedding as an issue,” he said.

The current demand of electricity stands around 600 MW while existing power plants hardly generate more than 553 MW when they are running in full capacity. This has resulted in a daily load shedding of 5 hours. The NEA has said there are no obvious alternatives to this problem before the start of monsoon.

The royal government may be wise to initiate dialogue with the mainstream political parties and the Maoists to resolve the crisis

By Dr. Som P Pudasaini

The seven-party alliance (SPA) and the CPN (Maoist) signed a second statement on 19 March 2006 reconfirming their commitment to the 12-point understanding reached between them on 22 November 2005, which was said to be a roadmap to peace, prosperity and democracy to be achieved through an election to a constituent assembly and by fighting against an autocratic monarchy.

Top leaders of SPA, however, were reluctant to sign the statement jointly with the Maoist leadership in view of the international pressure and their own lack of full trust on the Maoists. Also, it is rumored that the SPA wanted to protect their parties from being branded “terrorists” and face possible ban by the government if they entered into joint statement and actions right away. The move is probably pragmatic since the “slow and steady wins the race”.

The insurgent’s total commitment to peace and multiparty democracy is still a suspect. The USA has openly advised the parties to break the 12-point agreement with the Maoists. Even India, which has tacitly supported the understanding by allowing the SPA and the Maoists to conduct negotiations in the vicinity of New Delhi, is reported to have advised the parties not to be hasty in trusting the insurgents.

The Chinese State Councilor, Tang Jiaxuan, equivalent to a Deputy Prime Minister, during his March 16-18 Nepal visit had advised all the “constitutional forces in Nepal” to appropriately settle the current difficulties “through dialogue” maintaining national independence, sovereignty and unity. This was also the first time that a high ranking Chinese official met three top leaders of agitating mainstream parties- Girija Prasad Koirala of Nepali Congress, Sher Bahadur Deuba of Nepali Congress (D) and Amrit Bohara of UML.

While the SPA and the Maoists have now been able to protect the spirit of the 12-point understanding, they have yet to travel an arduous road before they reach a full understanding towards peace and stability in both letter and spirit. Nevertheless, salvaging the understanding in spite of pressures, confusions and attempt to widen misunderstanding has created a pace for them to move ahead. Among others, one of the difficulties now lies in the fact that the parties want to go for a constituent assembly election by reinstating the House of Representative dissolved four years ago but the Maoists insist on an interim government resulting from a national political conference. They have agreed to continue consultations to resolve differences.

The immediate benefit of the signed statement was the withdrawal of the 20-day blockade of cities imposed by the Maoists on 14 March and the indefinite Nepal bandh called to begin from April 3. In spite of the patrolling by security forces to secure supplies and movements, the blockade was beginning to cause shortages of petrol and kerosene in different places, raising prices and availability of necessities; including vegetables and fruits; and affecting movements of people and goods. The Maoists had felled trees and piled stones on roads and highways or dug them in many places. Farmers had started to suffer waste and losses as they could not transport perishables such as milk, vegetables and meat to markets. The movement of about 350,000 students soon appearing in the School Leaving Certificate (SLC) examination would have also been affected causing further pain to the already stressed examinees and their guardians.

The Maoists agreed to withdraw their blockade in return for the four day general strike and non-cooperation movement by the SPA beginning April 6 to mainstream fragmented movements for a decisive knock against the “royal regime”. The parties and the Maoists have also urged the international community to support their efforts to resolve the 10-year old conflict and attain progressive reform in the country. The government ministers are reported to be threatening the SPA to impose curfews if they went ahead with the strike and will not respond to the “Made in Delhi” statement. However, the people will have to bear again the brunt of the strike and government’s repression to foil it, including a loss of Rs. 4 billion in those four days.

The efforts of the seven party alliance to attract the Maoists towards peaceful resolution of the ongoing conflict deserves due support from all those interested in peace, prosperity and stability in Nepal.
Political mainstreaming of the Maoists is widely seen as a preferred choice for lasting peace and political stability. The efforts of the SPA to attract the Maoists towards peaceful resolution of the ongoing conflict deserves due support from all those interested in peace, prosperity and stability in Nepal. They must, however, present a clear roadmap to inclusive polity, good governance, conflict resolution and intra-party democracy to win full trust of the people towards their movements.

The Maoists must sincerely abandon violence, extortions and abductions and commit to competitive politics. However, they are likely to strike hard leading up to the general strike and beyond if one looks at the attacks they have intensified in the recent days, including around Kathmandu such as Dhading and Kavre district, and their commitment to the general strike.

The monarch and royal government may be wise to initiate dialogue with the mainstream political parties and the Maoists to resolve the crisis. The SPA and the Maoists should not shy away in offering a genuine safe landing to the king as their 12-point understanding is against “autocratic monarchy” not against a “constitutional” one. Too confrontational approach on the part of any will lead to further bloodshed against the wishes of the masses desirous of peace and development.

However, the king is likely to watch how the political events unfold in the coming weeks, including the impact of the general strike. He may then indicate his next move in his Nepali New Year 2063 message on April 14; which may include dates for the parliamentary election as per his February one roadmap or a clearer call for dialogue or the continuation of a confused status quo.

(Dr. Pudasaini has served as the Representative of United Nations Population Fund (UNFPA) in Sri Lanka and Yemen and Country Director for Maldives. Please send your comments to [email protected] or [email protected])

(Editor’s Note: Nepalis, wherever they live, as well as friends of Nepal around the globe are requested to contribute their views/opinions/recollections etc. on issues concerning present day Nepal to the Guest Column of Nepalnews. Length of the article should not be more than 1,000 words and may be edited for the purpose of clarity and space. Relevant photos as well as photo of the author may also be sent along with the article. Please send your write-ups to [email protected])

The National Human Rights Commission (NHRC) has urged Maoists to provide exact data of loss of its cadres in clashes saying false information provided by the Maoists in this regard has made it increasingly difficult to search for disappeared people.

Speaking at a discussion in Biratnagar on Saturday, NHRC member Sudip Pathak said that the Maoists should make public the name and address of people killed in clashes, according to reports.

The central representatives of NHRC arrived in the eastern development region a few days ago under a one month campaign of making public the whereabouts of the disappeared people.

They have been holding discussion, collecting data and counseling with civil society, media persons, victim’s families and security bodies.

Speaking at the function, rights protection officer of the NHRC, Shyam Babu Kafle, said the campaign has been initiated to pressurise both the government and the Maoists to make public the list of disappeared people.

It was stated that 201 people have been disappeared in eastern development region. Among them, 95 are disappeared by the rebels. Though cases of some people are in the process, there was no information on 63 cases.

The local administration has been detaining a mother with her three month old child in a dark roomon the charge of being a Maoist in the eastern district of Ilam, reports said.

Police arrested and detained Man Maya Mukhiya of Puwamjhua-3 when she came to the district headquarters to buy medicine for her three month old child, according to Kantipur daily.

The police also kept her three month old child when mother of Man Maya arrived at the district headquarters to request authorities for the release of her daughter.

Rights activists and relatives have been barred from meeting her saying the investigation has not been completed yet.

The child is said to be in serious condition.

Rights activists and relatives have protested the move and appealed the authorities to immediately release her.

However, Chief District Officer Krishna Prasad Poudel said that relatives were barred from meeting her as the investigation was on and added that Mana Maya was being treated in a humanitarian way.

Only a week after the seven-party opposition alliance signed a second understanding with the Maoists, a senior Nepali Congress (NC) leader has warned that the pact could lead the country towards disaster.

Speaking at an interaction at the Reporters Club on Saturday, NC leader Shailaja Acharya charged the party leadership of taking the ‘wrong course of extremism’ by adhering to the Maoist agenda.

Stating that there is serious ideological deviation in the party, she said that the party will collapse if it continued its agreement with the Maoists. “This could be a serious setback to the party and could even confine the NC to the pages of history,” she added.

She accused some “wrong elements” who have infiltrated the party, of trying to “capture the party structure”.

She also alleged that all 12-point’s of the agreement are the Maoists’ agendas and added that consensus among constitutional forces is the only way out of the current political impasse.

Shailaja said she is against the “extremist forces”. On the issue of unification of the NC and the NC (D), she said some “defamed faces” of both the parties must be removed first.

She further said the NC and other parties will not take part in the general elections. “We should not take part in the polls announced by the Panchas,” she said. She also urged the King to initiate talks with the political parties.

With the date of valley centered agitation of the seven political parties coming nearer, the Home Ministry has said that patrolling and checking have been increased in a drive initiated to make Kathmandu Valley safe.

The additional measures are in view of the possibility of infiltration by Maoists into the Valley, the Home Ministry said.

There will be thorough checking of passengers and vehicles at the Valley’s various entry points and on highways leading to Kathmandu.

The Ministry also urged people to bear with the inconvenience caused by such checking. In case of any suspicious or untoward activity, the Ministry has requested people to call 4211208 of the Ministry’s control room, 4412780 of the Police Headquarters, 105 of the Valley Divisional Headquarters of the RNA or 100 of the Valley Police Control Room in Kathmandu.

In cases outside the Valley, people should contact the nearest security body.

However, leaders of seven agitating political parties have said that the government’s move is an attempt to foil the valley centered movement of the seven agitating political parties that will kick off on April 6.

A bomb planted by the suspected Maoists exploded in the premises of Mahendra Multiple Campus in Nepalgunj in mid-western region this morning.

The explosion damaged a room of free student union. One person was injured in the blast.

The first year exam of proficiency certificate level was halted for few minutes after the blast.

According to security source, they are investigating about the incident.

A senior official of the Asian Development Bank (ADB) said that the ADB is concerned about the adverse impacts of Nepal’s complex security and political situation on its development and poverty reduction efforts

A press statement issued by the ADB said that Kunio Senga, Director General of ADB’s South Asia Department, during his talks with government officials said that ADB recognizes that Nepal is passing through one of the most difficult periods in its history and expressed concern about the disruption in basic service delivery to the poor, the lack of job opportunities and state of basic infrastructure.

“However, he was pleased that the Government had taken some difficult reform actions” the statement adds.

Senga visited agriculture, water supply and rural infrastructure projects funded by ADB in Pokhara and Tanahu districts.

“I was struck by how local communities are actively participating in development activities and that there is still development space in Nepal,” the statement quoted him as saying at the end of a five-day visit to Nepal on Sunday.

He further said that ADB’s future assistance to Nepal will be subject to a conducive environment for carrying out project work.

“It is my fervent hope that peace and stability would return to Nepal because it is very difficult for one country achieve its development and poverty reduction objectives rapidly in the current environment,” he added.

ADB is dedicated to reducing poverty in the Asia and Pacific region through pro-poor sustainable economic growth, social development, and good governance.

In 2005, it approved loans and grants for projects totaling $6.95 billion, and technical assistance amounting to $198.8 million, the statement adds.

Following a 2.02 points growth of the previous week, the index of Nepal Stock Exchange (Nepse) declined by 0.90 points over the week due to weak performance of commercial banks group.

The weekly data of Nepse shows that its index which opened at 339.60 points on Sunday decreased to close at 338.70 points on Thursday, the last day for trading under the regular lot.

The manufacturing group, trading group, finance group and development bank group maintained growth while the indices of commercial banks, the other group and insurance group declined. The index of hotel group remained unchanged.

According to Nepse, a total of 217,182 units of shares worth Rs 92,707,754 were traded through 2,199 transactions over the week. A total of 233,309 units of shares worth Rs 79,135,907 were traded through 1,941 transactions in the previous week.

The index of commercial bank group fell to 377.42 points, down from 378.75 points. The index of the others group decreased to 326.81 points from 333.41 points. Likewise, the index of insurance group declined marginally to 341.05 points, from 341.48 points.

Trading group saw a rise of 5.82 points reaching its index began to 147.54 points up from 141.72 points. Indices of manufacturing and finance groups increased to 291.50 points and 251.40 points respectively, up from 290.23 points and 250.47 points.

The development banks group registered a growth of 3.38 points, with its index rising to 272.87 points, from 269.49 points. The index of hotel remained static at 181.54 points.