Indian company SJBN Limited gets 679 MW Lower Arun Hydropower Project

Kathmandu: The Indian company SJBN Limited has been entrusted with the task of constructing the proposed 679 MW Lower Arun Hydropower Project. It has been decided to choose SJBN.

The decision was taken after evaluating the companies listed on the basis of international competition, said Dharmendra Kumar Mishra, spokesperson and joint secretary of the Investment Board. The project is located in Sankhuwasabha and Bhojpur districts of Province No. 1.

The government had presented the Lower Arun Project to the investors on the occasion of the investment conference held in Kathmandu in March, 2008. SJBN will prepare a detailed study report (DPR) of the project. Once the DPR is prepared, the actual capacity and cost of the project will be identified.SJBN is a subsidiary of Sutlej Hydropower Corporation Limited. Sutlej is a company owned by the Government of India. SJBN, which is constructing the 900 MW Arun III project, was claiming the lower Arun project. Arun III’s work is 40 percent complete.

The project was proposed by Hydroelectricity Investment and Development Company Limited (HIDCL) of Nepal and Power Construction Corporation of China Limited (Power China) United and Sutlej Hydropower Corporation of India Limited.The 40th meeting of the Board of Investment chaired by Prime Minister Oli had selected HIDCL and Power China United, India’s Sutlej Hydropower and Green Resources Private Limited and Electric Power Development Company (J Power).Of these, only HIDCL and Power China and India’s SJBN had submitted proposals for the project.

Green Resources and Japan’s J. Power did not submit a proposal. The proposal has been called for giving priority to free energy like the 900 MW Arun III under construction in Lower Arun. The Arun III project got 21.9 percent or 198 MW of free electricity. The board has not disclosed the proposal in Lower Arun.Companies participating in the bidding for the project will have to offer a minimum of 20 percent free electricity. The minimum free electricity limit has been fixed in the tender called by the Investment Board.

The board has fixed 50 percent of the bid for free electricity. The remaining 50 percent of the burden is on technical knowledge, power generation, issuance of primary shares (IPO) to the project affected locals and general public and the schedule of the project.Similarly, the proposing companies have to pay a minimum of Rs. 162.6 million to purchase the feasibility study report of the government.About 15 kilometers of the main tunnel of the project in Sankhuwasabha and Bhojpur will have to be constructed.

The feasibility study has shown that the project will cost Rs 150 billion. India had requested to allow Sutlej, which is constructing the 900 MW Arun III project, to build the lower Arun project. Earlier, the then Indian Minister of State for Energy Raj Kumar Singh had requested for the construction of the Lower Arun Project Sutlej.

The Arun III Project is a picking run of river project that can generate electricity by collecting water for 6 hours daily even in dry season where there is high demand for electricity. The water generated from Arun III will go directly to the lower Arun tunnel.Electricity will be generated by flowing water directly from the Arun III project through the tunnel. Feasibility study has shown that the cost will be cheaper as there is no need to build a dam for the project.