Dhalkebar-Muzaffarpur transmission line

Stakeholders of the 400 KV Dhalkebar-Muzaffarpur transmission line between Nepal and India have made substantial progress in taking the project forward. Signing a memorandum of understanding, Nepal Electricity Authority (NEA) and the three Indian stakeholders -- Power Trading Corporation (PTC), Infrastructure Leasing & Financial Services (IL&FS) and Power Grid Cooperation of India Ltd (PGCIL) -- have set May 2010 as the deadline for completion of the Power Purchase Agreement (PPA) and financial closure of the project. It is good that a deadline has been set for the PPA, the absence of which had left the project in limbo for too long. But Nepal and India, or Indian and Nepali companies for that matter, are not known for meeting their deadlines. This time they must ensure that things get done within the agreed timeframe. NEA, which has taken on the onus of "finalizing the designs of the additional lines" in collaboration with the government, PGCIL and the World Bank, should go about it without wasting any time. Delay in finalizing the designs will cause further delay in expediting the project.



Completion of this project will be pivotal in the development of hydropower in Nepal and it will also open up a new frontier in power import/export between Nepal and India. Absence of cross-border transmission lines had been the major bottleneck in exchange of power between the two neighboring countries. Once the project is completed, it will invite additional investments in harnessing hydropower in Nepal, which, if necessary in the long run, will invite further investments in transmission line construction. Though NEA, PTC, ILFS and PGCIL are the major stakeholders of the project the governments of Nepal and India and the World Bank must continue to play the role of facilitators.



The World Bank, whose financial help and technical expertise are very much anticipated by the project, also has a major role to play in its successful implementation. In addition to assistance with this transmission line, Nepal is seeking Bank aid for a substation at Dhalkebar, the Butwal-Dhalkebar-Duhabi line and other associated infrastructure. Nepal is in dire need of upgrading its power-sector infrastructure but lacks funds and to a large extent the necessary expertise also. The Bank can chip in to fill this void and help Nepal address one of her chronic bottlenecks in infrastructure. After pulling out at the last minute from the Arun III project in the early 1990s the World Bank earned a bad name for itself in Nepal, something it has not been able to live down since. This could well be an opportunity to delete that bad memory and replace it with a good one.

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