Nepal parliament panel okays energy deal with India

Kathmandu, July 27 (IANS) A parliamentary panel in Nepal Sunday asked the government to sign as soon as possible a "Power Trade Agreement" (PTA) with India under which New Delhi has proposed 100 percent Indian investment or joint ventures with Indian entities in the Himalayan country's power sector.

Both sides held marathon negotiations during the weekend visit here of India's External Affairs Minister Sushma Swaraj to firm up a deal.

"Large-scale investment is inevitable in the energy sector but investment will become uncertain in the absence of a power trade agreement. As a result, a PTA is necessary with India," read a statement on the committee's decision.

Reading out the statement, lawmaker Amrit Kumar Bohara, who chaired the meeting, said such an agreement "was necessary to attract investment", and emphasized on the need for concrete homework and coordination between the government and the committee on the same.

The PTA, however, has courted a lot of controversy in Nepal, as it has been alleged that India would capture Nepal's natural resources and monopolise its water resources.

Expressing concern over the postponement of the power deal, the Parliament Agriculture and Resources Committee Sunday directed the Nepal government to immediately conclude the PTA with India.

India had proposed the draft of the agreement May 8 to Nepal for consideration.

However, according to Nepali stakeholders, the most contentious clause in the draft was article 3 which speaks about investment in power generation and transmission, including joint ventures.

Article 3a says the parties will facilitate investment in each other's country in power generation and transmission, subject to legislation, while article 3b says the parties will cooperate in effective harnessing of Nepal's hydropower potential through facilitation and speedy construction of power projects in Nepal, either with 100 percent Indian investment or joint ventures with Indian entities.

Nepali officials say this clause gives the impression of denying involvement of other countries as well as Nepali companies in power generation and transmission.

"The content of the draft gives the impression of an umbrella agreement, which could be detrimental to Nepal," an official said.

With the article remaining silent on involvement of other countries, Nepali officials fear that investors other than from India will not be allowed in the country.

During the negotiations, officials from both sides agreed to end the disputes but did not reveal what was accepted by both parties.

Earlier, at the parliamentary panel meeting, Nepal's Energy Minister Radha Gyawali said that as energy was the first door to development of Nepal, a PTA with India was "essential".

"It is for the nation's development but we will keep national interest in mind," the minister said.

"The ministry will not step back on matters of national interest but power development is in the interest of Nepal," she added.

Nepali Congress lawmaker Gagan Kumar Thapa, however, blamed the energy ministry for creating an "unnecessary dispute" over the proposed PTA.

Communist Party of Nepal (Unified Marxist-Leninist) lawmaker Kashinath Adhikari sought an explanation from the government over the delay in concluding the agreement, though Nepal had sent its draft to India four years ago.

Energy ministry secretary Rajendra Kishore Chettri said the signing of the PTA was delayed due to lack of necessary homework for it.

"We are trying our best to conclude the negotiations before the visit of Indian Prime Minister Narendra Modi to Nepal, so that it can be signed during his visit," Chettri said.

Modi is scheduled to visit the Himalayan country in the first week of August.