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India drags feet in building new cross-border power line

- BIBEK SUBEDI, Kathmandu

Jan 28, 2018-The fate of 400kV New Butwal-Gorakhpur cross-border transmission line hangs in balance, as India is dragging its feet to build the crucial infrastructure that can further stimulate electricity trading between Nepal and the neighbouring country.

In the past, both the countries had agreed to build the Butwal-Gorakhpur transmission line as a backup for the Muzaffarpur-Dhalkebar cross-border line and to ensure larger cooperation in the energy sector. Now, India is questioning the power line’s commercial viability. 

Indian ambassador to Nepal Manjeev Singh Puri indicated on Saturday that India might not be interested in developing the Butwal-Gorakhpur cross-border power line if it is not commercially sustainable. 

Addressing the second edition of Nepal Power Investment Summit, Puri said commercial viability should be the precondition for investment in the project. 

Indian ambassador’s statement, according to the Ministry of Energy officials, is in line with statements made by Indian officials during the Nepal-India energy secretary-level Joint Steering Committee (JSC) meeting. 

During the last JSC meeting held in Kathmandu in February, both the sides had agreed to endorse the detailed report of the project prepared by a joint technical team and asked the technical team to recommend a funding modality to build the transmission line project. 

Later during the meeting of technical experts, Nepal had proposed that both the countries use their own financial resources to build the project in their respective territories. Around 20 km of the 135 km transmission line falls in the Nepali territory, and the rest is located on the Indian land.

India, however, did not present its proposal during the meeting and neither did it agree on the proposal tabled by Nepal. Instead, Indian officials who took part in the meeting repeatedly raised the issue of commercial viability of the project, casting doubts on construction of the project.

“India wants to replicate the model used in construction of Muzaffarpur-Dhalkebar cross-border transmission line to build the new project,” said an informed source at the Energy Ministry. Under the Muzaffarpur-Dhalkebar modality, Nepali side, according to the official, has to pay certain rent even if the cross-border power line is not used by Nepal. “Therefore, it looks like India will not endorse our development modality immediately,” the source added.

But the Energy Ministry looks determined to develop the infrastructure on the Nepali side and has sought green signal from the Ministry of Finance to move ahead with the project. 

The Energy Ministry has prioritised the construction of Butwal-Gorakhpur transmission line as it can efficiently distribute imported power to high energy consuming cities like Bhairahawa, Butwal, Pokhara and Narayangadh. The power line can also be used to evacuate surplus energy produced in Budhi Gandaki, Marshyangdi and Trishuli corridors which are home to majority of the hydropower projects in the country. 

Nepal has already arranged funds to develop the portion of transmission line that falls within its territory. 

It is planning to build the transmission line using the grant provided by the Millennium Challenge Corporation (MCC), an independent US government agency. An agreement to this effect has been signed.

Published: 28-01-2018 08:54

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