Kathmandu. A high-level committee formed to review the current status, progress and effectiveness of the licenses issued by the Department of Electricity Development has submitted its report to Minister for Energy, Water Resources and Irrigation Biraj Bhakta Shrestha.
Receiving the report, Minister Shrestha thanked the committee members for fulfilling their responsibilities in a serious manner and said that the suggestions included in the report would be implemented immediately along with legal and technical evaluation.
The committee has submitted its report with suggestions on the need of comprehensive policy, legal and structural reforms in the licensing system. A meeting was held on April 2 under the coordination of Joint Secretary Mohan Shakya at the Ministry of Energy, Water Resources and Irrigation to review the present status of the licenses issued by the Department of Electricity Development as per point 74 (b) of the 100-point Government Reform Action Plan of the Council of Ministers. The five-member high-level committee was formed with Diwas Bahadur Basnyat, Nikunj Bhandari, Shalikram Bhandari and Jeevan Rana Magar as members.
The committee has submitted a report to the Ministry with suggestions for improvement by identifying policy, technical, financial and legal weaknesses in the process of issuing licenses after carrying out a detailed study on the status and progress of the licenses issued so far.
The committee has also recommended to initiate the process to scrap the license of the promoters who do not continue the construction work for a long time even after the completion of the Power Purchase Agreement (PPA) as per Section 8 of the Electricity Act, 2049.
The report has suggested various policy reforms to make the license distribution system more transparent, competitive and in line with national interest. The committee has pointed out the need of maintaining uniformity through necessary legal amendments by reviewing the contradictory and ambiguous provisions in the Electricity Act-2049, Electricity Regulations-2050, Hydropower Development Policy-2058 BS and directives related to licensing.
Likewise, the committee has suggested removing duplication of jurisdiction between the Investment Board, Industry Ministry and Energy Ministry regarding the license and investment approval of electricity projects. The report states that important issues like amendment of license, management of project bank and sale and transfer of license should be incorporated in the regulation by incorporating them in the legal level above the directive.
The committee has also pointed out the need to make legal provisions in line with the national interest by removing ambiguities regarding the process of transfer of ownership of the project, operation management and revenue collection after the expiry of the production license. Suggesting that the existing ‘first come, first serve’ system should be transformed into a competitive bidding system, the committee has recommended bringing a new electricity act clarifying the provisions related to electricity trade and the jurisdiction of the federal, provincial and local levels. The committee has also suggested preparing a national electricity development plan, transmission line master plan, power demand master plan and minimum cost generation plan.
Similarly, legal provisions should be made to complete the environmental approval and environmental impact assessment (EIA) process related to forest, protected area, national park, buffer zone and other areas within 12 months. The committee has also recommended the government to bring ‘Sunset Law’ to remove obstacles seen in land acquisition, use of forest area, supply and use of explosives.
