Thursday, August 30, 2018

750 MW West Seti project doomed, and BIMSTEC plan for $50 bn infrastructure projects

From The Kathmandu Post: The West Seti Hydroelectric Project has all but collapsed after the Chinese developer turned down the government request to execute the project citing financial infeasibility. The all-important two-day meeting between Investment Board Nepal (IBN) and China Three Gorges International (CTGI) ended inconclusively on Wednesday, with the latter expressing inability to move ahead despite assurance from the government on capacity optimisation and US dollar power purchase agreement. 

While the investment board has not categorically said the deal with the Chinese company is over, senior officials who spoke to the Post say this as the end of Chinese company’s involvement in the West Seti project. Whether or not the Chinese company will completely pull out of the project now entirely depends on Prime Minister KP Sharma Oli, and if he agrees to all the terms raised by the Chinese developer. Officials wouldn’t say if there were chances for such reconsideration.

The government side was flexible on addressing two major issues of the Chinese developer--dollar PPA and the downward revision of the project’s installed capacity. Officials present at the meeting said the Chinese developer did not show any intent to carry forward the project. Instead, the issue of resettlement and rehabilitation was brought forward by the Chinese company which it termed would be expensive and unpredictable. In a bid to make the project feasible, the investment board even made an offer to the representatives of the Chinese company, going beyond the guidelines issued by the government for the dollar-denominated power purchase. The official guidelines say the payment to the developer is made in convertible currency for a period of 10 years or until the time the project pays back the foreign debt, whichever is earlier. The investment board had offered to increase the period to 12 years for the West Seti project. The IBN also offered to downsize the project capacity to 600MW from 750MW.

Foreign ministers agree on projects worth $50b

From The Kathmandu Post: In an ambitious plan to connect the member states of BIMSTEC, foreign ministers from the seven-nation group identified and agreed on Wednesday to push forward 167 various connectivity-related projects at an estimated cost of $50 billion. The ministers agreed to approve projects, at least in principle, following a detailed study by the Asian Development Bank. The member states are developing BIMSTEC Transport Connectivity Master Plan, with a goal to complete it by the end of September 2018, Foreign Minister Pradeep Gyawali told the Post. 

The ADB study included transportation and cross-border facilitation, multimodal transport and logistics, infrastructure development, aviation, maritime transport, human resources development, as well as communication linkages and networking.
The BIMSTEC Transport Infrastructure and Logistic Study (BTILS) was updated by the ADB in 2014. Out of 167 projects, the study has prioritized 66 projects. 

Wednesday’s meeting also underlined the establishment of BIMSTEC Permanent Secretariat in Bangladesh; BIMSTEC Cultural Industries Observatory (BCIO) in Bhutan; and BIMSTEC Centre for Weather and Climate (BCWC) in India as some of the key achievements in institutional development.