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Royalty on Surveying Hydroelectricity
By Kathmandu Metro Reporter in Kathmandu
The website of the Department of Electricity Development states that the department has been processing the survey licenses for 40,000 MW hydro projects at an average license fee of Rs. 10,000 per MW. This means approximate revenue of Rs 400 million to the department. However, most of the companies applied for licenses are either Indian or Nepali with low or no financial and technical capacity to develop these projects.
It indicates that the department is ignorant of the current market price of license fee. The estimated income from license fees for surveying 40,000 MW would be Rs. 80 billion if it applies the current market price of license fee. This amount is greater than all the revenues the government received from other sources in 2007.
The price of hydropower licenses for up to 10 or 20 MW (the average capacity of Nepali developers) should be kept at its current rate of Rs 10,000 per MW. However, for any power project above that (in which most foreign parties will apply), the minimum rate should be set at Rs 2 million per MW. (Source: Nepali.Perspectives: Nepal Just Lost Rs. 80 Billion, August 12, 20080
