Nepal Maoists renew attack on GMR

Nepal Maoists renew attack on GMR

The former guerrillas, who have formed a local committee in remote Dailekh district to oppose the 900 MW Upper Karnali hydropower project being developed by GMR, called a mass meeting in the district Monday to announce their continued opposition to it.

The key speaker was Dharmendra Bastola, a member of the Maoists' decision-making body, the politburo, and the regional chief in the west. Calling the government's decision in 2008 to award the Upper Karnali contract to GMR "anti-national", Bastola said the Upper Karnali Struggle Committee will not allow the state to deploy army guards at the site of the beleaguered company.

On May 22, a Maoist-led mob attacked the GMR office and site camp in Dailekh, burning them down and injuring a guard as well as two engineers. Since then, except for the corporate social responsibility projects - including running a health post and a pre-school - undertaken by GMR in the remote and difficult to access district, all work has remained grounded.

GMR was in the process of completing its environmental impact assessment and hold public interactions. Now the $469 million project faces uncertainty with the communist-Maoist government dragging its feet on providing security.

Though the Jhala Nath Khanal government agreed, under pressure, to deploy army personnel at the site, and the defence secretary forwarded the request to the cabinet, the council of ministers has still not taken a decision.

Also, nearly three weeks later, police have drawn a blank in the course of investigations, failing to arrest a single perpetrator. GMR's survey licence ends in November 2011 and the delay is bound to affect the pace of work as well as estimated costs.

Thanks to Nepal's convoluted energy laws, after the survey, GMR will have to apply freshly for a power generation licence and the Maoists have said they will oppose the bid.

The former insurgents are the largest party in the communist-led coalition government and Prime Minister Jhala Nath Khanal has been a puppet in their hands since they helped him win the prime ministerial election this year.

Another foreign investor, Australia's Snowy Mountain Engineering Corporation, faces the scrapping of its licence to develop the 750 MW West Seti hydropower project after being stalled for over a decade by the Maoist insurgency and local resistance.

Ironically, while failing to provide security and a conducive work environment for foreign investors, Nepal this month unveiled ambitious plans to establish an entity that will solely fund energy projects.

A consortium of GMR Energy Limited, GMR Infrastructure Limited and Italian-Thai Development Project is developing the Upper Karnali, in which Nepal Electricity Authority gets 27 percent free equity and Nepal 12 percent free power.

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