Two of the influential members of technical committee on Project Development Agreement (PDA) draft of mega project Upper Karnali still have reservation on the cash incentive.

Chief secretary Leela Mani Paudyal and central bank governor Dr Yuba Raj Khatiwada have opposed cash incentives to GMR – the developer of 900- megawatts Upper Karnali Hydropower project – claiming that it is not necessary.

Though, the 13-member technical committee had on Friday submitted its report to Prime Minister Sushil Koirala saying that they could not reach any agreement on cash incentives in lieu of VAT and other taxes to the project, the government is planning to follow the Fiscal Policy that has ensured the incentives.

Both of the responsible high level bureaucrats have been opposing the idea of cash incentive of Rs 5 million per megawatt to the export-oriented project claiming that it would set a negative precedent.

The government has to pay Rs 4.5 billion to GMR, if if the Investment Board of Nepal agreed to pay cash incentives to it.

Paudyal and Khatiwada argued that the cash incentives was meant for the projects for domestic consumption developed by the domestic players.

The committee had submitted the report without the consent of two members on the issue of paying cash incentives, said vice chair of National Planning Commission Dr Govinda Raj Pokharel, who led the technical committee

The PDA draft – prepared by the Investment Board of Nepal – included cash incentive as provisioned for developers of projects for domestic consumption in the curent fiscal year’s policy.

The governor was against cash incentive as the money to be paid to developers would come from the taxpayers’ money. Likewise, paying cash incentives for GMR means, Arun III (900 megawatts), Upper Marshyangdi-2 (650 megawatts) and Lower Arun (400 megawatts) will also claim the cash incentives, which will hit the government coffer.

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