The new government has a large mandate to work effectivelyWhat is the conflict between your ministry and Investment Board Nepal (IBN) over decisions on hydropower projects?
As a sign of the changed geopolitical situation since Oli’s last tenure as prime minister, he and his Indian counterpart Narendra Modi released a joint statement amid his visit to India about the need to implement past agreements between the two countries.
Also announced were plans to boost connectivity with a focus on railroads and waterways. India seems keen to address issues from past agreements to allow the two countries to move forward together.
Oli’s grand plan to bring economic development seems more plausible with the symbolic support granted by India. At such a time, the PM hasn’t completed consolidating his home base by unifying his party, the CPN-UML, with the Maoist Centre as promised.
Anil Giri and Tika R Pradhan talked to Maoist leader and Minister for Energy, Water Resources and Irrigation Barshaman Pun about the government’s development and energy security plans and the proposed unification of the two parties.
What is the conflict between your ministry and Investment Board Nepal (IBN) over decisions on hydropower projects?
The issue is over the provisions set for IBN. The law states that IBN can decide the type of financing and economic policies for any hydropower project having a capacity of 500 MW or more. What they have been pushing for now is the right to grant licences for such projects too. It is not in IBN’s legal power to do so. They also do not have the manpower or expertise to make decisions in the manner they want to. The board was envisioned as an entity to tie in investments for massive infrastructure projects so that they can be fast-tracked and implemented. Its job is to focus on economic and financing options and help bring in investments where the government cannot.
An example of such massive projects is the Budhi Gandaki Hydropower Project which was initially given to a Chinese company, China Gezhouba Group. The government then scrapped the contract and decided to build it on its own. Amid these happenings, the Chinese ambassador met with you and shared some concerns. So will Nepal build the project or start another tender process?
The government’s plan is to adopt a mixed energy policy. We have planned that 40-50 percent of the energy sources will be storage type hydro projects, 30-40 percent run-of-the-river type hydro projects and the rest solar and other sources. Currently, the 92 MW Kulekhani project is the only storage-type source.
Storage-type projects are a priority for the government. For now, we believe that the private sector should be allowed to build run-of-the-river plants. The private sector currently does not have the capacity to build large reservoir-based hydropower projects. And considering the massive load centres in Pokhara and Kathmandu, Budhi Gandaki becomes all the more important to complete.
Therefore, the governmentwill complete the project on its own. The project is not economically viable, so the private sector is not interested in it. We have to think about the financing modality before beginning the project.
What is your ministry’s roadmap to improve the energy sector which is currently facing transmission issues and shortages?
The good thing about the current government is that it has received a large enough mandate to be allowed to work effectively. We are planning to interlink with other ministries so that we can work well and fast.
For one, we plan to explore a regional energy market so that production is incentivised. Domestic demand is projected to hit 10,000 MW by the end of the decade. We have also found many issues in transmission. We will be using river basins as a basis for transmission paths.
There are already projects in the pipeline to improve this, and we will be planning and implementing more of them. We have also been asking energy developers to focus on areas where we are building transmission lines. We plan to make the Gorakhpur-Butwal cross-border transmission line a reality whatever the modality.
We will also enforce licensing regulations strictly to benefit genuine developers. Transmission and generation of electricity is already being handled by separate companies as per our unbundling plan.
Energy development and investment companies have also come up. The necessary laws are in place to create an energy regulating agency to coordinate public and private companies.
The prime minister’s visit to India has brought forward his plans on energy generation, road infrastructure and greater regional connectivity. Is his dream attached to India’s plan to develop river transportation systems?
Nepal’s plans are separate, though there is a chance of interlinking. After creating a reservoir on the Budhi Gandaki, we are planning to build a barrage at Devighat to manage water flow and produce electricity.
This plan will allow a regular water channel from the Narayani River to the Ganga in India. Another plan focuses on the Sun Koshi 1, 2, 3 storage-based hydropower projects and a dam on the Koshi to create a channel all the way to Kolkata in India.
So power generation and regulating waterways are interconnected. We will look at investments from India and other foreign entities besides investing our own funds in such high dam projects.
The slogan was “small is beautiful” with regard to hydro projects. Now it seems that the government is focusing on massive projects.
The thinking is that the government should focus on large projects. In the next few years, run-of-the-river projects will cover our immediate monsoon-time electricity needs, but only reservoir-type projects will ease our winter-time energy crunch.
We have been discussing not only energy trade but also the idea of energy banking with India. The idea is to exchange energy like a commodity. Nepal will be producing surplus energy during the monsoon that India needs while India has a surplus during the winter that Nepal requires.
But India’s policy to purchase power only from projects with an Indian investment has discouraged other investors.
Investors do not really have to be discouraged as the domestic demand alone will amount to 10,000 MW in the next decade. We have also assured everyone that we will create (or have already created in the case of Saarc) frameworks to sell our energy to neighbours. We have signed a power trade agreement with India that makes their policy redundant, so we will work to change it.
On the political front, there is talk that the two parties will be unified on Baisakh 9. Have all the necessary steps been completed?
April 22, or Baisakh 9, 2006 BS, was when the Communist Party of Nepal was established. We are going to unify the two parties on this date to mark the beginning of a new communist movement in Nepal.
The preparation of the required statute has reached the final stages. We just have to adjust the leadership structure. The top level leadership structure has been finalised, but the rest of the leadership has to be adjusted as well. Talk has emerged about sharing the posts on a 50-50 basis, but we will see what the leaders decide.
Reports say that the UML is not agreeable to a 50-50 arrangement. How will this affect unification?
The two leaders had previously informally agreed to share leadership positions on a 50-50 basis. It was in this spirit that the basis for sharing the top posts equally arose. Regarding provincial and federal governments, the idea was to share it on the basis of the electoral share; hence, everything is not equally divided in government.
It is natural for the larger party to flex its muscles a bit more while it is also normal for the smaller party to have fears about being swallowed up. That is why we need compromise and equality. We will share the seats equally in every committee in the unified party until a party convention is held in two years or later. The future leadership of the party will be decided by voting at the convention.
There are other reported differences like whether to include the words ‘People’s War’ in the new party’s statute or not. How are they being solved?
The People’s War is part of our past, and the left alliance’s election manifesto has also mentioned it. The exact structure of the unified party’s statute is yet to be fully decided. There is room to move forward without disputes whether these words are added or not.
But I don’t see why accepting the People’s War as part of our history should be a big issue—it led to republicanism and the return of democracy. We have a majority government right now because of the alliance between two communist parties, one of which was involved in the conflict. One cannot take the fruits of the conflict while rejecting that it occurred.
There are reports of KP Oli wielding a lot of power and using it without consultation. He reportedly transferred secretaries without ministerial consultations. What is your opinion?
The secretarial transfers occurred while I was away on a UN meeting. There were some accusations of PM Oli unilaterally taking the decision to transfer secretaries. I have not had a chance to discuss the matter with him, but I will raise the issue after his return from India. However, as we work further and if we feel excluded, we will definitely talk to the PM about it.