Nepal SC stays negotiations on GMR's power project

Nepal's Supreme Court has stayed the negotiation for a power development agreement with Indian infrastructure major GMR for developing a 900 MW Upper Karnali Hydropower Project, responding to a petition claiming it ignored the rights of local people.
A single bench comprising Justice Bharat Bahadur Karki yesterday issued the stay order that will remain effective until July 31, wherein a bench would decide whether a further stay is required, according to the court officials.
The court also ordered the government not to accept Detail Engineering Report of the project by the GMR Energy.
The court's decision comes at a time when the Investment Board Nepal (IBN) is holding talks with the Indian power developer for signing the power development agreement (PDA).

The single bench had issued the stay order in response to a petition filed by 29 local people of the affected districts in North-west Nepal.
The petitioners argue that the memorandum of understanding (MoU) signed between the Government of Nepal and GMR Energy to develop the Upper Karnali Hydropower Project in January 2008 has ignored rights of the locals in the affected districts.

They claim that the Indian power developer failed to comply with the provision of starting the project within three months of signing the MoU and furnish a progress report every six months as per the Electricity Regulation.

"In such a situation the MoU is supposed to be invalid. But, the survey license period has been extended time and again under various pretext," reads the petition.
They also claim that the government's decision to increase the capacity of the project to 900 MW is not transparent and has kept the locals in the dark.
When the MoU was signed between the government and GMR, the project's capacity was 300 MW.
The petitioners have raised objection to the provision in the MoU that states the government acknowledges that due consideration may be accorded to the consortium for the allotment of upstream/downstream project, if any.

"This may debar the Nepalis from using the water resources without prior consent of the developer," Nepal's ekantipur newspaper quoted the writ as saying.