Indian firm's hydro power project under legal scanner in Nepal

KATHMANDU: A legal petition filed in Nepal against the awarding of the 300 mw Upper Karnali hydro power project to an Indian company could result in similar contracts being put under scanner, leading to delay in their execution in the Himalayan state. A group of people in Karnali region in western Nepal has filed a case in the Supreme Court against the government's decision to award the contract for constructing the Karnali power project to an Indian private company GMR, alleging that it has undermined the interest of the local residents and violated constitutional provisions. The petitioners have demand the scrapping of the contract between GMR and Water Resources Ministry, claiming that it was unconstitutional, said an official at the Nepal Electricity Authority (NEA) GMR, a major infrastructure building company with interests in energy and urban development, is the first Indian firm to win the contract for constructing hydel power in Nepal. The petition states that since the hydro power is a subject of national interest, the contract must be approved by a two-third majority of the interim Parliament. It said that a cabinet decision in this regard is not sufficient. Chief Justice Kedar Prasad Giri, who began hearing the case yesterday, will resume the hearing on Wednesday. If the court verdict declares the deal 'unconstitutional,' all other power deals, including 402 MW Arun III project bagged by India's Sutlej Jal Vidyut Nigam, will also have to be endorsed by parliament with two third majority, said Uttam Kumar Shrestha, Deputy Managing director of NEA.

8 Mar, 2008, The Economics Times