GMR Upper Karnali Hydropower, the developer of the much-awaited Upper Karnali Hydropower Power Project, is planning to start distributing compensation to landowners in July. The 900 MW project is spread over Dailekh, Surkhet and Achham districts in western Nepal.

Initially, the developer had expected to complete the compensation distribution by June as per the agreement with locals. However, it was postponed due to the second phase of local level elections which is scheduled to be held on June 28.

Sources close to GMR said it had readied the compensation amount required to acquire around 1,000 ropanis in Dailekh and Achham. 

“GMR was planning to complete the process by June-end, but it later decided to postpone it by a month after consulting with various government agencies, including the district administration and Investment Board Nepal,” said the source. “There have been many attacks against GMR in the past, and we were warned such events might happen again during election time.” 

Locals agreed to postpone the compensation distribution by a month after GMR explained the situation to them. 

The developer is planning to deposit the compensation amount directly into the bank accounts of the landowners. Nepal Investment Bank has opened a branch at the project site, and locals have been opening accounts there. 

Last November, GMR sealed a land acquisition deal with the residents of Achham and Dailekh after completing the process of pooling private land required for the project. 

The company signed an agreement with the residents of Sattalla in Dailekh to pay Rs895,000 per ropani. It has offered to pay Rs805,000 per ropani to locals of Bhairavsthan in Achham and Sigaudi in Dailekh. 

Although the private land acquisition process went smoothly, the hydropower developer has been struggling to acquire forest land. 

The government recently launched stringent guidelines on forest land acquisition that would significantly increase costs, and the Indian developer has complained about the new rules. 

A provision in the forest clearance guidelines launched recently by the Forest Ministry requires developers to provide compensation for the entire area affected by their project. 

During a meeting held with developers before publishing the guidelines, the ministry had agreed that they would have to pay compensation only for the land on which permanent structures like powerhouse and dam are built. It was settled that a nominal lease fee would be charged for the rest of the area affected by the project. 

Likewise, developers are required to plant 25 new trees elsewhere for every tree that is cut down for the construction of the project. They also have to nurture the saplings for a period of five years, according to the guidelines, a copy of which was obtained by the Post. 

However, there had been a verbal agreement between the ministry and developers that they would have to plant only twice the number of trees that are cut down. 

The government and GMR signed a project development agreement (PDA) in September 2014 which states that the developer will give 27 percent of the shares in the Upper Karnali Hydropower Project to the government, and the country will also receive 12 percent (108 MW) of the total energy produced for free. 

Similarly, the project is expected to provide more than 2,000 jobs and the government is expected to earn Rs300 billion in financial benefits.