The long-standing dispute between the Energy Ministry and the Investment Board Nepal (IBN) has resurfaced, as Energy Minister Barsha Man Pun remained conspicuously absent from an event organised by the board on Friday to mark the laying of a foundation stone of Arun III Hydropower Project.

Indian Prime Minister Narendra Modi, who was on a two-day visit to Nepal, and his Nepali counterpart KP Sharma Oli jointly laid the foundation stone of the 900MW project being developed in Sankhuwasabha district from a remote location in Kathmandu.

Talking to the Post, Pun’s close aide said the minister was not invited at the event organised by Prime Minister’s Office.

The source further said Pun was also not invited at the bilateral talks between the two sides where other ministers were present. While this development has surprised officials at the Energy Ministry, Pun is unhappy with the handling of the matter by the Prime Minister’s Office.

The minister was not invited at the event as the project was being implemented by the IBN, sources close to Pun said. According to them, Minister Pun was not amused when the IBN board meeting—chaired by PM Oli—authorised its CEO to grant generation licence to Arun III project. Pun is of the view that awarding of licence falls under the ministry’s jurisdiction and IBN’s role should be limited to arranging funds for project development.

“It seems PM Oli is undermining his Energy Minister,” said the source. “He will soon raise the issue with Oli.”   

The IBN and the ministry have been at loggerheads over the implementation of hydropower projects with an installed capacity of more than 500MW. Earlier in December 2017, a dispute flared up between the two sides after the IBN asked the ministry for the implementation rights for the 688 MW Betan Karnali and 617 MW Bheri-1 hydropower projects in western Nepal, claiming that it held the sole authority to execute schemes with a capacity of 500 MW or more. In a letter to the Energy Ministry in December 2017, the IBN had asked the ministry to send the documents of the two hydropower projects whose survey licences were issued by the ministry. Subsequently, the Energy Ministry decided to consult the Law Ministry before reaching a decision.

The Law Ministry said that the Energy Ministry had the sole authority to issue survey licences for hydropower projects, and that issuing such licences would not impinge on IBN’s jurisdiction nor violate the provisions of the Investment Board Act.

Again in March 2018, the board demanded the original files of all 500 MW-plus hydropower projects that are currently being monitored by the ministry. The IBN wrote to the Energy Ministry asking it to submit the files within 15 days after getting the go-ahead from the 29th IBN board meeting chaired by PM Oli.