Massive hike in hydro license fee this week

BY BIKASH SANGRAULA
KATHMANDU, Aug 26 - The cabinet will effect massive increments in survey license fees as well as annual survey license renewal fees for hydropower projects by amending the fee appendix of the Electricity Regulation 1993 this week, according to sources at Ministry of Water Resources.

The survey license fee is being increased from the existing range of Rs 125 to Rs 750, to the range of Rs 50,000 to Rs 2 million, according to ministry sources.

The amendment, expected in a couple of days, will slap a survey license fee of Rs 50,000 for projects ranging from 1 megawatt (MW) to 5 MW, Rs 10,000 per MW for projects ranging from 5 MW to 100 MW, Rs 1 million for projects ranging from 100 MW to 500 MW and Rs 2 million for projects above 500 MW in size.

An equal amount of renewal fee will have to be paid by the licensee every year during renewal of the survey license. If work progress is achieved according to the work schedule committed to at the time of acquiring the license, there can be a maximum of four renewals. There is no provision of renewal after five years as the ministry officials consider this more than enough time to complete a project survey.

The government is making such provisions to ensure that survey license holders achieve work progress according to their commitment.

As of June 15 this year, the government had issued 141 project survey licenses to prospective developers for projects ranging from 1 megawatt (MW) to 400 MWs, according to figures provided by the Department of Electricity Development.

Combined, these projects have a total capacity to generate over 4,000 MWs of electricity.
However, actual survey progress has been seen in very few of these projects.
The existing lax licensing provisions were made at a time when there was little private sector interest in developing hydropower projects in the country.

Today, the interest is immense, to the extent that prospective developers are ready even to bid for projects, as has been the case for the 402 MW Arun III and 300 MW Upper Karnali.
Under the new provisions, the one time generation license fee for projects of the size 1 MW to 5 MW will be Rs 100,000.

Similarly, the fee for projects of size 5 MW to 100 MW will be Rs 500,000, fee for projects of size 100 MW to 500 MW will be Rs 1 million, fee for projects of size 500 MW to 1000 MW will be Rs 2.5 million, while fee for projects above 1,000 MW in size will be Rs 5 million. The previous fee ranged from Rs 3000 to less than a hundred thousand rupees.

Generation license is issued for a one-time period of 35 years for projects planned to sell power in the country, and 30 years for projects planned for export.
Posted on: 2007-08-26 21:13:47 (Server Time)