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Political Interferences In Development

Issue November 2017

Political Interferences In Development

Siddhi B Ranjitkar


The cabinet meeting decided to rescind the memorandum of understanding the previous government signed off with the Chinese company on the Budhigandaki Hydropower Project. The investment board decided to extend the time for mobilizing the resources required for developing the Upper Karnali and Arun III hydropower projects, and also to conduct the detailed feasibility study on the monorails. Businesspersons at the Sunsari-Moran Industrial corridor have been paying NPR 150 million more for transport every day. Nepal-bound petroleum products sold in India for profit but Deuba stopped Nepal Oil Corporation (NOC) from adjusting the prices of petroleum products on a par with the Indian prices. Minister for Commerce Meen Bahadur Bishwakarma said that the mindsets of the politicians and bureaucrats needed to be changed to develop the country.


On Monday, November 13, 2017, the cabinet meeting and the board meeting of the Investment Board presided over by Prime Minister Sher Bahadur Deuba made important decisions on the development of hydropower projects in Nepal, according to the news on ‘artha bazaar’ supplement to “gorkhapatra” of November 14, 2017, and the news continues as follows.


The first decision was to revoke the memorandum of understanding former Energy Minister Janardan Sharma signed off with the Chinese company China Gezhouba Group Corp (CGGC) for engineering, procurement, construction and finance for developing the Budhigandaki Hydropower Project with the capacity of 1,200 MW. At that time Prime Minister Prachanda was about to turnover the power to Deuba: the coalition partner.


The news on on November 14, 2017 stated, “CPN-UML Chairman KP Oli has taken a swipe at the government’s decision to revoke the license for development of the Budhigandaki Hydroelectric Project awarded to China Gezhouba Group Corporation (CGGC) claiming the government has revoked it after it did not get the promised commission.”


Prior to awarding the Budhigandaki Hydropower Project to the Chinese company, the ministry of energy of the then government had initiated the project setting up a Development Committee for the implementation of the project but it was dissolved. This project suffered the severe setback because of the termination of the memorandum of understanding with the Chinese company, and the dissolution of the Development Committee set up for implementing this project.


According to the detailed project report (DPR), the project cost is estimated at NPR 255 billion ($2.5 billion). After the completion of the project, it generates annual revenue of NPR 622.7 million for 15 years, and thereafter NPR 3.71 billion annually.


Deputy Prime Minister Kamal Thapa holding the portfolio of energy minister proposed to terminate the memorandum of understanding with the Chinese company CGGC stating the previous coalition government of NC and CPN-Maoist-Center had done without the competitive bidding, and the Parliamentary Public Accounts Committee had ordered to cancel the memorandum of understanding on this project stating the irregularity in awarding the project to the Chinese company. Thapa has said that it is a sensitive project. The news ends here.


Why the project is sensitive, Thapa did not take troubles to elaborate and did not want to explain what the sensitive means. It might be because the southern neighbor did not like it. Who knows, maybe only Thapa knows.


Why Thapa wanted to cancel the Budhigandaki Hydropower Project with the capacity of 1,200 MW when the NC election manifesto stated that the NC government would generate 10,000 MW within 10 years. The cancellation of this large project certainly goes against the stated goal of the NC to develop 10,000 MW hydropower project within 10 years and also against the election code of conduct.


Thapa making the Deuba government to annul the large Budhigandaki Hydropower Project has surely discredited the NC at the time of the upcoming federal and provincial elections. Most of the voters would take it the NC government on the advice of the RPP Chairman Thapa ending the building of this project has gone against the economic development.


Instead of expediting the construction of such large project to double the per capita income during 10 years as stated in the NC manifesto, the NC has abruptly put an end to the project. How could voters believe the manifesto of the NC and would vote for the NC candidates following its manifesto?


Deuba has hurt Thapa very much not giving him the important ministerial portfolio, and not giving the constituency in Jhapa where NC leader Krishna Prasad Sitaula has been contesting the election. So, Thapa must have held a grudge against Deuba, and Thapa must be doing disservice to Deuba repealing the construction of the large hydropower project at the time of election campaign. The opposition political parties would take the advantage of the non-visionary approach of Deuba in the elections.


Deuba had stopped the NOC from increasing the prices of petroleum products stating it would adversely affect his party at the time of elections, and it goes against the election code of conduct. So, the prices of petroleum products remain low compared to the Indian prices.


However, Deuba knows that he could benefit from the low prices of petroleum products, as the Nepal-bound petroleum products could be sold in the Indian market at high prices and reap a huge profit. Former Prime Minister Girija Prasad Koirala did the same for two years from 2006 to 2008 causing a short supply of petroleum products in Nepal making the consumers suffered very much and even retarding the economic activities consequently reducing the economic growth during the period. So far, the shortage of petroleum products has not been felt in Kathmandu at least this time, yet.


However, the ‘artha bazaar’ supplement to “gorkhapatra” reported on November 14, 2017 that the Nepal border areas have the shortage of petroleum products as most of the petrol pumps have been selling the petrol and diesel in the Indian markets for the price advantage. Price of petrol is NPR 19 per liter and that of diesel is 27 per liter higher in the Indian market, the news stated.


Thanks to Deuba, the border petrol pumps have been making a considerable amount of profits selling petrol and diesel in the Indian market causing the shortage of these items in the border areas in Nepal. The shortage might quickly spread in other parts of Nepal.


How could Deuba: a politician of high caliber decide to have such huge price difference of petroleum products between Nepal and India ultimately causing the short supply of the vital fossil fuel at the time of elections?


Even though it might adversely affect the NC party in the coming elections, Deuba has let the price difference stands as it brings a lot of money to the people dealing with the petroleum products. Certainly, some profits would flow in to the NC party and Deuba otherwise he would not keep the price difference.


The second decision the Deuba government has taken on Monday, November 13, 2017 is to extend the time for mobilizing the financial resources for the Upper Karnali Hydropower project and Arun-III project, the ‘artha bazaar’ supplement to “gorkhapatra” reported on November 14, 2017.


The 28th board meeting of the Investment Board Prime Minister Deuba presided over has decided to extend the time period for one year to the Indian promoter called Sutlej Hydropower Nigam of the Upper Karnali Hydropower project for mobilizing financial resources, and six months to the promoter: GMR Energy Limited of the Arun-III for the same. Both are the Indian companies. Sutlej is the State owned company and GMR is the private limited company. Both Karnali and Arun-III have the capacity of 900 MW each. Both companies have been working for the last three years for financial resources mobilization.


Indian Prime Minister Narendra Modi had accepted the invitation of Prime Minister Deuba while he was in India for a state to come to Nepal in November 2017, and inaugurate the Arun-III project. Obviously, the GMR has to mobilize the financial resources for this project, yet to make happen the inauguration of the Arun-III project.


The next decision, the board meeting of the Investment Board has taken is to conduct the detailed feasibility study on the monorails number one route: Nagdhunga-Kalanki-Kotesvor-Dhulikhel and then prepare a detailed project report, and do additional necessary work on the number two route: Buddhanilkantha-Satdobato-Kathmandu Terai fast track station area.


It is hard for the common folks to believe that the monorails would be a reality any time soon, as Prime Minister Deuba, who has been unable to make the concerned State agency fill up the potholes on the Kathmandu streets, and control the massive dust kicked up every day would be able to build such rails. Then why Deuba has taken such decisions. The answer is the amount of commission it would bring. Again the money matters not the economic development.


Prime Minister Deuba and his deputy Thapa are not concerned with the huge transport loss the businesspersons at the Sunsari-Morang Industrial Corridor have been incurring every day due to the need for the trucks carrying raw materials detouring because it won’t bring any money to both prime minister and his deputy.


The news in the ‘artha bazaar’ supplement to “gorkhapatra” reported on November 14, 2017 that the industry owners at the Sunsari-Morang Industrial Corridor have to bear the loss of NPR 150 million every day because the Indian side has prevented the trucks of above 20 tons ply on the Mirgunj bridge since the flood in the last mid October, and the trucks have to detour 80 km that also on the narrow road causing delay and high cost of transport of raw materials.


Speaking to the anchor of the Radio-Nepal morning program called ‘antar-sambad on November 14, 2017, Minister for Commerce Meen Bahadur Bishwakarma has said that the bureaucracy and the politicians have been the main obstacles to the investment in Nepal.


The minister has said that any investor when comes to Nepal, we welcome her/him at the airport with the red carpet, and then s/he stays in an expensive hotel at her/his own cost. Then, s/he starts interacting with the State bureaucrats, and the government ministers. Within a week such investors fly back without considering coming back again.


He also has said that the bureaucrats and the ministers have harassed the investors so much that not only the foreign but also the national investors have had hard time to survive in Nepal. Instead of promoting the industries and businesses, the bureaucrats and ministers tend to control them. So, the minister has said that we need to change the mindsets of bureaucrats and the ministers.


The Deuba government is not supported by the parliament, as it has been dissolved after the nominations of candidates for the federal and provincial elections were filed. So, the Deuba government is only to assist the Election Commission for holding the provincial and federal elections peacefully and impartially, nothing else to do.


However, going against the election code of conduct and disregarding any ethics of the acting government, the Deuba government has taken the vital decisions on scrapping the memorandum of understanding on the Budhigandaki Hydropower Project, and other two-hydropower projects, and on the monorails. Deuba also prevented the NOC from adjusting the prices of petroleum product on a par with the Indian market prices. Actually, NOC wanted to do so to prevent the outflow of the Nepal-bound petroleum products to India.


The Election Commission does not need to fear the effective enforcement of the election code of conduct as Prime Minister Deuba would not be able to introduce a motion to impeach Chief Election commissioner or any other commissioners in absence of the parliament as Deuba did to the Chief Justice  Sushila  Karki in the past when she was to rule following the law.


However, the Election Commission has demonstrated a soft corner to any actions Deuba took going against the election code of conduct. It has surely weakened the independence of the Election Commission, and the impartiality of the elections it holds. So, enforcing the election code of conduct is in the interest of the nation and of the Election commission, too.


Minister for Commerce Meen Bahadur Bishwakarma is correct to say that the mindsets of the ministers and the bureaucrats need to change for putting the country on the fast-track economic development. It should start from the politicians holding the positions of prime minister, and then deputy prime minister, ministers, and then surely to the bureaucrats. Deuba would not have done what he has done recently if he has the correct mindset to run the country appropriately. The distorted mindsets of these guys have always twisted the development process for their benefits rather than the country. For them, money matters not the development of the country.


November 15, 2017

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