Kathmandu: The Ministry of Finance and the Ministry of Law, Justice and Parliamentary Affairs have suggested that the Budhi Gandaki Hydropower Project can be constructed by making it a public company.

The Ministry of Energy, Water Resources and Irrigation had recently prepared the required documents of ‘Budhigandaki Hydropower Development Company Limited’ and submitted it to the Ministry of Finance and Ministry of Law, Justice and Parliamentary Affairs for their financial and legal opinion.

According to Spokesperson Madhu Prasad Bhetuwal of the Ministry of Energy, Water Resources and Irrigation, the ministry of law and finance have suggested moving ahead with the work of the hydropower project by making it a public company.

“Based on the documents sent by the ministry of energy, the law ministry has sent some additional suggestions," he said. "The Ministry of Law has already suggested that the project can be built by opening a public company," he added.

Spokesperson Bhetuwal said that the proposal would be taken forward to the Cabinet meeting by making a decision at the ministerial level on the basis of suggestions from both the ministries. "After studying the suggestions from both the ministries, the minister will submit a proposal to the Cabinet meeting on the transformation of Budhi Gandaki Hydropower into a public company and the necessary modalities," he said. "The meeting of the Cabinet will make the necessary decision on how to move the project forward," he added.

In 2015, Tractable Engineering estimated the cost of the Budhi Gandaki hydropower project at $2.59 billion. NEA Engineering, which was tasked by the energy ministry to review the cost of Budhi Gandaki, has proposed a cost of $2.76 billion.

In the budget of the coming fiscal year 2022/23, it has been announced that this project will be constructed from internal sources. The documents prepared by the energy ministry states that the authorized capital of the proposed company will be Rs 1 trillion. According to the company's documents, its authorized capital will be divided into one billion ordinary shares at the rate of Rs 100 per share. The issued capital of the company is proposed to be Rs 40 billion. The capital pledged by the founders of the company for immediate repayment will be Rs 20 billion. In the management letter, it is said that 400 million shares will be given to the ministry of energy, 250 million to the ministry of finance and 150 million shares to Nepal Electricity Authority (NEA).

Similarly, 100 million shares each has been proposed for the locals and general public respectively. The Ministry of Energy has already distributed around Rs 35 billion in land compensation for the project. Similarly, the government has collected Rs. 71 billion for the project through infrastructure tax.