West Seti project in deep water

*West Seti project in deep water*
The Himalayan Times,. August 20, 2010
Ramesh Prasad Bhushal
www.thehimalayantimes.com/fullNews.php?headline=West+Seti+project+in+deep+water&NewsID=254397

KATHMANDU: The 750-MW West Seti Hydropower Project looks more like a
dead duck. Estimated between $ 1.2 and 1.7 billion, the largest
reservoir power project was envisioned some 13 years ago after a private
builder — West Seti Hydro Power Limited — struck a deal with the
government.

Years of wrangling, and in recent times in the wake of foreign
investor's lack of interest in the project, WSHP is as good as dead. But
government officials are waiting for another four months before they
call it dead and buried, as the renewed deadline given to WSHPL to
submit financial closure ends in December only. So, officially, there is
still a glimmer of hope.

WSHPL has already missed two deadlines — that too served to it under
fresh time limit: Signing of Power Purchase Agreement in May and Equity
Share Agreement in June.

The Australian promoter of the project, Snowy Mountain Energy
Corporation, has stopped funding the liaison office in Kathmandu and
field offices in Doti and Dadheldhura since last week. SMEC decision to
step aside is linked with the lack of interest shown by a Chinese
investing company and the Asian Development Bank to pour in money in the
mega project.

The WSHPL signed an MoU with China National Machinery Import and Export
Company in December last year in the presence of Prime Minister Madhav
Kumar Nepal and Energy Minister Prakash Sharan Mahat during their visit
to Beijing.

"In the MoU, the Chinese company had committed that it would invest in
the project. But after few months, it backtracked on its commitment
saying Nepal lacked investment-friendly environment," said Himalaya
Bahadur Pande, Director, WSHPL.

Most of the preliminary works like Environmental Impact Assessment and
Detail Engineering Report have already been carried out. "The company is
not in touch with the ministry, which seems to be almost convinced that
WSHPL is not going to implement the project as it has already missed the
PPA and ESA deadlines," added Pande.

But ministry officials are waiting till December. "Chances that they
(WSHPL) will come up with investors in the next four months are slim.
But we have to wait till December," said Anup Upadhyay, spokesperson for
Ministry of Energy.

But the government does not have any alternative in hand for the project
if present company fails to woo any investor by the end of December. "It
is yet to be decided what move the ministry will make," added Upadhyay.

Pande claimed a few Indian and other international companies had shown
interest in the project but refused to disclose the names of the
companies. "We will come up with some results within a month," added Pande.
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