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DAM-L Arun 3 in Nepal: Euroient Misses Deadline Third Time: Warned. (fwd)



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Subject: Arun 3 in Nepal: Euroient Misses Deadline Third Time: Warned.

[Charset iso-8859-1 unsupported, filtering to ASCII...]
Kathmandu Post, November 24, 2000

Govt warns Eurorient over missed deadlines

  Post Report

  KATHMANDU, Nov 23 - The government may not give the go-ahead to
Eurorient Investment Group, an
  American company wishing to develop the Arun III hydel project, if it
continues to buy time to submit
  necessary documents required to obtain a survey licence, an official
warned here today.

  "If they (Eurorient) continue appealing for the extension of the
deadline to submit a `performance
  assurance_ like this, the government will definitely think twice,"
Angira Acharya, Senior Divisional
  Engineer at Department of Electricity Development told The Kathmandu
Post.

  Today was the final day of the second 15-day deadline given to the Los
Angeles-based power
  development company to submit the _performance assurance_ - a document
from an internationally
  recognized insurance company which assures that the company in
question has deposited the
  requested amount.

  Eurorient Group was required to submit a performance assurance of Rs
42 million - at the rate of Rs
  100 per Kilo Watt - to obtain the licence of the 402 Mega Watt Arun
III, according to Electricity
  Regulation.

  However, Binay Amatya, Eurorient_s agent for Nepal, today went on to
submit one more application -
  the third such - to the Department, appealing that the deadline for
submitting the performance
  assurance be extended for another fortnight.

  "We could not get all the things done on time because there exists no
such insurance company in
  Nepal, and also because it was too short a time-frame to get the
performance assurance submitted
  from a European insurance company," Amatya told The Kathmandu Post
over the telephone late
  Thursday.

  He, however, added that a United Kingdom (UK)-based European Insurance
Company has promised
  to submit the document by the end of December.

  Eurorient, which was chosen by the government in late June from
amongst three similar interested
  companies, applied for the survey licence to develop Arun III three
months back.

  Detailed design works and feasibility studies of the run-of-river
hydel project, which will be one of
  Nepal_s biggest once completed, had been finished in 1993.

  So much so that the project_s tender processes were already underway.
But the then government was
  forced to abort it after the World Bank, which had supported it for 10
years, pulled out in 1995.

  At that time, the project_s cost had been estimated at US $1 billion.
The price, however, has not yet
  been reviewed.

  Eurorient Group was said to be joining forces with two other
multinational companies - ABB and
  Privam company, "USA_s pioneer" power developers. The companies have
already developed bigger
  hydel projects in the US, Europe, China and India.

  Officials had said in July that the government was also planning to
allow the same company to
  develop 335 MW Upper Arun and 308 MW Lower Arun if Eurorient works
satisfactorily on the Arun III
  project.



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