The Supreme Court on Wednesday ordered the government to suspend the survey licence issued to TBI Holding for the Tamakoshi 3 Hydropower Project.
Issuing the interim order, the apex court told the Energy Ministry to put the permit on hold till November 15.
The ministry and TBI Holding have both been summoned to a hearing to decide whether to continue the suspension.
The Supreme Court issued the order in response to a writ petition filled by lawyer Subash Budhathoki on Tuesday seeking a stay order against the government’s decision to award the 650 MW project to TBI Holding without competitive bidding.
In the petition, Budhathoki has accused the Energy Ministry of violating the Public Procurement Act, Investment Board Act and Good Governance Act besides several constitutional provisions when it awarded the licence to TBI Holding.
The Energy Ministry issued the survey licence to TBI Holding on October 12, a day after it submitted an application to the Department of Energy Development. “The ministry acted in such haste that it raised serious suspicions about foul play,” said Budhathoki.
The ministry awarded the licence even as Investment Board Nepal (IBN) was preparing to invite international bids to develop the much-awaited hydropower project. IBN is a government agency authorised to implement hydropower projects with an installed capacity of 500 MW or higher.
“As per the Investment Board Act 2011, IBN has the sole authority to implement projects of 500 MW and above,” Budhathoki said.
IBN prepared a modality for the construction of the project under the public private partnership (PPP) model with a mix of domestic
and international investments after the potential developer, Statkraft of Norway, pulled out in January 2016. The board had sent the proposal to the ministry for its input in April.
As IBN waited for the input, the Energy Ministry instructed the Department of Energy Development to initiate the process of implementing the project in violation of the Investment Board Act.
Norwegian company Statkraft had signed a project negotiation agreement with IBN, but left just before project development agreement (PDA) negotiations began.
It had spent Rs1 billion to conduct a survey, obtain technical updates and perform an environment impact assessment after receiving a survey licence from the government in March 2007.
Officials said it abandoned the project over concerns about finding buyers for the electricity produced by the project. Statkraft had planned to sell energy to India, but it lost hope after the southern neighbour imposed a trade blockade and relations between the two countries soured.
Tamakoshi 3 is a run-of-the-river project located in Dolakha and Ramechhap districts east of Kathmandu.
From The Kathmandu post