A new company has finally been registered at the Office of the Company Registrar to construct the multi-purpose Budhigandaki Hydropower Project, construction of which has been delayed by for several years because of changes in the government and cancellation of one contract after another.

The government registered 'Budhigandaki Jalbidhyut Company Limited' on Friday to build the 1,200 MW hydro project in domestic investment, according to the Ministry of Energy, Water Resources and Irrigation.

A cabinet meeting held in April this year endorsed the Energy Ministry‘s proposal to establish a public company and generate funds internally for the construction of the project.

Some time ago, the government decided to take away the Budhigandaki reservoir project from China Gezhouba Group Company Limited and to proceed with the construction of the project by setting up the company itself.

The government has finally set up its own company for the construction of the project, breaking the long-standing dispute over whether to let India or China to build it.

The purpose of establishing the Company is to produce, transmit and sell electricity, to study, construct and operate the transmission system necessary to connect the electricity produced from the project to the national transmission grid, to provide water for irrigation, to conduct other income-generating programmes including fisheries and to provide infrastructure for tourism promotion.

Similarly, the Company will build main structures related to the project, and perform other tasks as specified for the successful implementation and operation of the project.

The authorised capital of the Company is Rs. 20 billion and immediate issued capital will be also Rs. 20 billion.

The per share price is Rs. 100 and has been divided into 200 million units of ordinary shares. The capital agreed to be paid immediately by the founders of the company will be Rs.16 billion.

From the issued capital of the Company, 20 per cent shares will be allotted for the public, 10 per cent for the residents of the affected areas and 10 per cent for the general public.

The Ministry of Energy, Water Resources and Irrigation will have 50 per cent, the Ministry of Finance 30 per cent and Nepal Electricity Authority 20 per cent ownership of Rs. 16 billion.

Founder shares of the company may not be sold or mortgaged for five years from the date of commencement of business. However, this provision will not hinder the addition of new founders by changing the existing share structures.

The shares owned by the government of Nepal cannot be sold or transferred to any other organisation except for the bodies under the government of Nepal, the provincial governments or the local levels.

The Company will carry out survey, study, exploration, monitoring and evaluation of the project, approve the cost estimate of the project and receive loans and grants from the government of Nepal and domestic or foreign organisations for the development, construction and operation of other structures related to power generation.

It is said that more than 3,500 households of 27 villages of Gorkha and Dhading will be displaced for the construction of this proposed 1,200 MW hydropower project. According to Environment, Compensation Distribution, Resettlement and Rehabilitation Unit of Budhigandaki, about 48,948 ropanis of land has been acquired so far to build the project. About 58,153 ropanis of land will be acquired for the project.