Power Pact With Nepal To Benefit Enron

Two treaties signed here yesterday by India and Nepal open the way for private companies, including multinationals, to participate in bilateral trade, specifically in power and in air traffic. Given Prime Minister I K Gujrals sharp focus on South Asian regional cooperation, this could be the first step towards opening up the economic borders within Saarc.

Gujral told reporters on his arrival here that he hoped his visit could pave the way towards making Saarc a free trade area by 2001 AD. The visit, Gujrals first bilateral one as Prime Minister, is crucial for the success of his Gujral doctrine.

 

Indeed, officials in both delegations were by evening, talking of improved bilateral ties. A number of processes have been started, as Indian foreign secretary Salman Haider said.

Yesterdays power pact could hold the key to solving Indias power problems. Nepal has an estimated potential to generate 83,000 mw of the relatively cheap hydel power. At present, it generates only 245 mw. Now, companies like Enron Power Corp which has expressed interest will be able to generate power in Nepal and sell it in power-starved India.

The treaty allows any party in Nepal or India to trade power. They may negotiate the terms and conditions, including the quantum and parameters of supply, the points of delivery and the price. The treaty promises that any such parties shall be granted all necessary assistance, incentives and concessions.

Among the other important events on the first day of Gujrals visit was the exchange of instruments of ratification of the Mahakali Treaty, which should set the basis for cooperation in the exploitation of Nepals abundant water resources for the mutual benefit of both countries.

The most important feature of the civil aviation agreement is that, after the necessary legal requirements in both countries, any airline will be able to operate the agreed routes between the two countries.

In the past, only the two designated carriers could operate these routes. This agreement amends the MOU signed in 1972 and in October, 1991.

Nepals airlines shall now be able to operate flights to Bangalore and Lucknow, in addition to the earlier agreed destinations. Indian carriers will be entitled fly to any two points beyond Kathmandu, excluding points in Thailand. These points are to be specified later by India. The capacity entitlements are to be increased from 4,000 seats per week in each direction, to 6,000.

Officials point out that the opening up of routes between India and Nepal to private airlines will give a fillip not only to private investment but also to tourism in Nepal, which is organising visit Nepal Year in 1998.