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Kathmandu Sunday July 09, 2000 Ahsad 25, 2057.
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Arun III investors arriving very soon
By Surendra Phuyal
KATHMANDU, July 8 - Representatives of Eurorient
Investment Group USA are arriving in the capital ‘very soon’ to apply for power
development licence for 402MW Arun III.
"Managing Director of Eurorient Investment Group Ron
Nenchimia arrives here within two weeks," Binaya Amatya, Eurorient’s agent for
Nepal, told The Kathmandu Post today. "While in Kathmandu, he will apply for
development licence, work towards setting up the group’s Nepal office and sort out
Power Purchase Agreement (PPA) with India."
Eurorient is required to pay a sum of Rs 42 million - at the
rate of Rs 100 per Kilo Watt - to obtain the power development licence of Arun III,
according to the Electricity Regulation.
Following a cabinet decision, the government on June 28
decided to allow the American group (of companies) to develop Arun III project which lies
in the eastern hill district of Sankhuwasava.
The proposals of ASTQ Holdings Corporation, Canada, and
Sushashan Power Company, were rejected.
The government also plans to allow the same company to
develop 335 MW Upper Arun and 308 MW Lower Arun if Eurorient works satisfactorily in Arun
III, government sources say.
Department of Electricity Development is said to be in the
process of inviting Eurorient officials through a letter that it plans to send some time
next week. The company is required to submit an application within a month after receiving
the letter, according to the Regulation.
Amatya said Eurorient’s Ron Nenchimia, besides preparing
a detailed schedule to develop the power project, will also visit India and meet the
Central Indian authorities there to sort out PPA. "India has verbally agreed to sign
the Arun III PPA with us," he added.
Detailed design works and feasibility studies of the
run-of-river hydel project, which will be one of Nepal’s biggest hydel projects, had
been completed in 1993. So much so that the project’s tender processes were already
underway. But the then-government was forced to abort it after the World Bank, which had
supported it for 10 years, pulled out in 1995.
Then the project’s cost had been put at US $1 billion.
The price, however, has not yet been reviewed.
The Department’s Director General Bishnu Bahadur Thapa
said he is "quite optimistic" about Arun III "this time because of the
Americans’ keen interest". "We can be sure after they pay the royalty
amount (required to get the licence)," he said. "If they don’t, another
process will begin next month."
Euroreint’s Agent for Nepal, Amatya said the
company’s top executive Nenchimia has already conveyed the group’s keen interest
to develop Arun III in an interview to BBC Friday.
He informed that Eurorient Banking Group is coming together
with two other multinational companies - ABB and Privam company, "USA’s
pioneer" power developers. He added that the companies have already developed bigger
hydel projects in the US, Europe, China and India.
"The Arun III project will be completed on time,
provided the roadmap is clear: that both the government and locals support speedy
construction," Amatya said.
As for the road to link the remote hydel construction site,
he said, "the company has already allocated budget for that. Survey works will begin
shortly after we get the licence. If all goes well the road construction will begin after
Dashain-Tihar."
A 130-km road needs to be constructed to link the Arun III
site with Tehrathum’s Basantapur or with Sunsari’s Chatara. The survey will
finalize the "shortest and best" link.
When the issue of whether or not to develop the Arun III was
in the spotlight in the early 1990s, hydro power experts and environmentalists were up in
arm against the project.
Hydropower expert Bikash Pandey of Winrock International was
one of those who had opposed the project. He appears to be satisfied this time.
"We only opposed the project’s high price back
then," he recalled. "We were against the huge amount of loan that Nepal was
going to receive from World Bank. It could have been a risky venture."
Another expert Dr Binayak Bhadra, who lobbied in favour of
Arun III, says, "the project is a very good one and that the private sector’s
involvement is indeed very much encouraging."
"Arun III is a very attractive project in terms of both
investment and geological setting," said Dr Bhadra. "The run-of-river project
can supply 402 MW of electricity all year round."
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