He made this statement at the 'Tax and Pay PPA Arrangements in the Budget and Their Impact on the Hydropower Sector' organized by the Nepal Infrastructure Journalists Society on Monday.
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Ganesh Karki, president of the Independent Power Producers Association of Nepal (IPPAN), said that the government has brought an anti-development 'take and pay' provision in the budget. He made this statement at the 'Take and Pay PPA Arrangement in the Budget and its Impact on the Hydropower Sector' organized by the Nepal Infrastructure Journalists Society on Monday.
He said that if this point of the upcoming budget is not corrected, a crisis has been created where not a single hydropower project can be built. ‘The energy sector has been surrounded from all sides and is in real trouble, so we expect everyone’s cooperation,’ said Karki.
Presenting at the program, IPPAN Deputy Secretary General Prakash Dulal said that if ‘Take and Pay’ is not corrected, the energy sector will be in serious crisis. ‘With this arrangement, there will be no PPA for 17,117 MW projects,’ he said.
According to IPPAN’s internal study, the investment of Rs 109 billion that has been invested so far will be lost, and the investment of Rs 3314 billion that will be received in the future will also not be received. It is mentioned that the government will also lose Rs 327.62 billion that will be received while the project is being constructed and Rs 31 trillion that will be received after the construction is completed.
Banks will not invest in projects with PPAs based on ‘Take and Pay’. This will narrow their investment area and disrupt the safe investment environment in hydropower, according to IPPAN. When a one-megawatt project is built, 100 people get employment for 2 to 3 years. Even after the construction is completed, 10 people get long-term employment. 'Since the construction of the project is stopped by take and pay, there is a possibility of losing a large area of this employment and increasing unemployment in the country,' he said.
Industries such as cement, dandi, and duwani play a direct role in the construction of hydropower projects. After the project is stopped, these industries will not be able to work at full capacity. Due to this, their production will decrease and the possibility of opening new industries will be low. The government's ambitious target of generating 28,500 megawatts of electricity in 10 years and the target of exporting 10,000 megawatts of electricity to India will be left behind.
Commenting on the presentation, Chartered Accountant Narayan Poudel said that there is no alternative to converting take and pay into 'take or pay'. "We cannot find an answer to the question of who brought up such a sensitive issue, why, and for what purpose," he said.
Another chartered accountant, Ghanshyam Poudel, said that the energy sector is not moving towards commercialization, but towards making it subsistence-oriented. He said that if consumption cannot be increased, it will be fatal in the long run.
Former Vice Chairman of the National Planning Commission, Dr. Govinda Raj Pokharel, said that the government has attacked the sector that creates employment. He said that the government is insensitive to the energy sector, which is suffering from a lack of policy infrastructure.
At the program, President of the Federation of Nepal Construction Entrepreneurs Ravi Singh said that construction entrepreneurs are currently receiving very little electricity, and this budget arrangement has also put the construction sector in a difficult situation. Former President of the Cement Manufacturers Association, Dhruba Thapa, said that weakening energy producers will also weaken the cement industry, which is necessary for overall project construction. "This needs to be corrected immediately," he said.
