Thursday, July 28, 2011

Government scraps West Seti licence

Govt scraps West Seti licence
The Himalayan Times, 28 July 2011

KATHMANDU: A Cabinet meeting today decided to scrap the licence of West
Seti Hydropower Limited, which was licensed to construct the 750-MW
power project.

For the last 16 years it was unable to rope in investors and the
agreement of the company was amended 10 times. The company had been
seeking grace time since long, saying it wanted to close all its finances.

The Asian Development Bank and China EXIM Bank that had earlier
expressed their interest to invest in the project later said they would
not. The 10th amendment of the agreement had given December 2010
deadline for financial closure but the company had sent a letter to the
government on December 24 seeking another year. In March, the government
had asked the company to clarify why it failed to meet the deadline for
the financial closure. On March 24, the company promoter admitted that
it had failed to convince the investors and requested six more months
before it closed all its finances.

Stating that the reason given by the company for its failure to close
its finances was not convincing, the government today decided to scrap
its licence to pave the way for the construction of the project.

The estimated cost of the project is $1.2 to 1.7 billion and most of the
preliminary works such as Environmental Impact Assessment and Detail
Engineering Report have already been prepared.

The Australian promoter of the project, Snowy Mountain Energy
Corporation, had stopped funding the project's liaison office in
Kathmandu and field offices in Doti and Dadheldhura last year.

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