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dam-l LS: Karnali: Enron Demands Government Mediation



Source: Kathmandu Post Feb. 10, 2000

Enron Corp demands government mediation

  By Prashant Aryal

KATHMANDU, Feb 9 - The US energy giant Enron Corp has convinced Nepali
authorities to sign an agreement saying HMG would undertake and finalize
within one year an agreement with India that resolves the issue of
down-stream benefits accruing out of the huge Karnali-Chisapani
multi-purpose project.

Highly placed government sources told The Kathmandu Post today that
Enron officials were coming to Kathmandu soon to sign the agreement with
officials of Ministry of Water Resources.

The agreement basically puts the ball in the government's court as far
as negotiations with India on resolving the down-stream benefit issue is
concerned.

"Enron originally said that it would itself negotiate with India but now
that the US giant has realized the difficulties in such negotiations, it
has asked HMG to undertake such talks with India," an official familiar
with the latest development said. Enron wants such talks to be concluded
within a year, he said.

Only after Nepal and India agree to some framework of sharing of
down-stream benefits will Enron pursue the all important power trading
agreements with India, officials said.

The development comes some months after an all party meeting in the
capital gave Enron the green signal to pursue an initial survey licence.
The conditions were - resolving the issue of sharing down-stream
benefits, ensuring basic necessities to the villages at the project
site, and ensuring that the huge amounts of investments poured into the
project have no negative effects on the World Bank's development lending
to Nepal.

The Karnali-Chisapani project, if developed, will have one of the
world’s highest rock-fill dam, and generate 10,800 megawatts of
electricity. It also has the capacity to irrigate 3.2 million hectares
of land in India and an additional 191,000 hectares in Nepal. The
project could cost as much as US 8 billion dollars.