It is common practice for companies to hold licences for years and then sell them to another company. Late last year, GMR (the same company that holds the licence for Upper Karnali) pulled out of the 600MW Upper Marsyangdi project after holding the licence for years. A consortium of Nepali and Chinese investors bought shares from GMR just as work was due to start. The parliamentary committee of Nepal has formed a probe committee to investigate further.
China is becoming a new but important player in Nepal’s energy politics, dominated by India for decades. There are two big projects in pipeline, the $2.5 billion Budi Gandaki and the $1.8 billion West Seti – both reservoir projects, and both controversial.
Earlier last year, the Nepal government announced that the 750 MW West Seti project, on one of the tributaries of the Karnali in western Nepal, would be built by Nepali firms while the license of the project had already been given to China’s Three Gorges Company (CTGC). Negotiations then failed, resulting in the Chinese withdrawing from the project.
The 1,200MW Budhi Gandaki in central Nepal has also had a series of setbacks as the Nepal government awarded the project to China’s Ghezhuoba firm, only to scrap it a year later, and then re-awarding the contract to the same company.
This has increased doubts among locals that Karnali will ever be built. “The most productive time of my life has gone waiting for this project to kick off,” says Bal Bahadur Shahi at Ramaghat, 3km downstream from the project site.
Frustration is growing and locals are in a mood to fight back. Says Shahi: “We will wait at least for one more year. If the project is still not implemented, we will ask the government to take it over.”
The story is jointly published by Nepali Times and The Third Pole. Subsequent installments of this five-part series will appear from 8-11 January.