On September 6, the anti-graft body ordered the Ministry of Energy to scrap survey licenses of three companies for failing to conduct the survey, and power generation licences of seven companies for failing to carry out construction work despite completing the survey.

The association said a proper study on the projects has to be carried out before imposing such a “harsh” decision.

The ministry has been asked to scrap power generation licenses of 50MW Karuwa Khola, 6MW Buku Khola, 45MW Lower Indrawati, 175MW Chahare Khola, 400MW Lower Arun, 3.4MW Midim Khola, 14.3MW Upper Mailum Khola, 18MW Upper Solu Khola and 6.8MW Upper Khoranga Khola projects. Those facing annulment of survey licences are 36MW Karuwa Khola, 60MW Bhotekosi-5 and 6MW Buku Khola projects.

“The CIAA decision has put these projects under a big trouble. These projects have already made an investment ranging from Rs 60 million to Rs 250 million,” said IPPAN President Khadga Bahadur Bisht. “Such a ‘carpet’ decision should not be implemented.” He said the government should look at the projects categorically and those having positive track record

should be allowed to work. Bisht said the lack of clarity on the development of hydropower projects too is to be blamed for the “improper” CIAA decision.

“Three government agencies—Department of Energy Development, Nepal Electricity Authority (NEA) and Development Committees—are involved in electricity generation, which has made things messy,” he said. CIAA Spokesperson Sridhar Sapkota said there are no legal provisions for the revision of the CIAA decision. “We ordered the government to scrap their licenses as they could not perform their task in time,” he said.

“The measure was taken to end the tendency of ‘occupying rivers’.”

He said the projects were found not doing financial closure in time and not signing power purchase agreement (PPA) with the Nepal Electricity Authority.

Representatives of the companies facing the CIAA action highlighted problems they face to carry out work on the projects. Rameshwor Rijal, promoter of 14.3MW Upper Mailum Khola Hydropower Project said those willing to “capture” their licenses may have influenced the anti-graft body. “Although there is a clear legal provision that hydropower licenses cannot be transferred to another company once issued to one, we came to know three developers have applied for the licenses of our projects,” said Rijal.

He said before the CIAA started its investigation, the National Vigilance Centre (NVC) had also probed the projects, but it was satisfied with the performance.

“We have already constructed 12km access roads apart from completing several other tasks,” he said.

Article 49 (5) of the Electricity Act has provisioned the survey has to be completed within five years after the issuance of the license. Based on the same legal grounds, the anti-graft body instructed the line ministry to scrap the license.

Legally, hydropower firms have to complete survey-related tasks like environment impact assessment, feasibility study, and design drawing during the five-year period by any means, and those firms with generation license should start the work immediately after the license issuance.

Sthir Babu Ghimire, managing director of Midim Hydropower Project, said his company was scheduled to complete the financial closure by mid-December 2014.

Other project developers were of the view the CIAA has to make a rational decision by studying each and every project separately.