Hydropower Judicial Decision A peek into the issues involving Hydropower

Hydropower Judicial Decision: A peek into the issues involving Hydropower

Alpana Bhandari is the author of this article, a law graduate of American University Washington College of Law who practices corporate law.

Corporate Lawyer Nepal has provided legal advice on hydropower issues. We have a separate Division for Corporate Law. The Supreme Court of Nepal has been both decisive and indecisive in the case of hydropower development. In my article, I go over some of Nepal’s Supreme Court’s hydropower rulings.

1. The hydropower development has received support from the Supreme Court.

The generation of hydroelectric power is not a natural resource. The majority of petitioners file a writ petition seeking cancellation of the hydropower projects, arguing that in order to reach an agreement on hydropower, parliamentary approvals are required under constitutional provisions because hydropower is a natural resource. The petitioners argue that hydropower without parliamentary approval is unconstitutional. However, in all of the writ petitions, the Supreme Court has ruled that electricity production and exportation can be carried out in the same way as the production of any other type of thing, object, or service. As a result, it does not require parliamentary approval.

It cannot be referred to as a prohibitory act unless expressly prohibited by law. If hydropower is to be considered a natural resource, the food grains grown on the land must also be considered. Following that, the situation may arise to prevent its delivery.

2. The precedents established in the following rulings are listed below.

Jindal Steel and Power Limited, based in Delhi, India, vs. the Ministry of Energy, Water Resources, and Irrigation, NKP 2067 Decision No. 8334  Page 717.

In the event that the government unilaterally permits the Arun III hydropower project to conduct hydropower surveys, the Delhi-based Jindal Steel and Power Limited filed a writ petition in which the writ is quashed, arguing that the March 2, 2008 division of natural resources agreement with Satlej Hydropower Corporation cannot be implemented.

Gorakh Bahadur BC. et al. Vs. Office of the Prime Minister and Council of Ministers et al NKP 2070 Decision N. 8982, Page No. 2356

The writ petition was dismissed on the grounds that an agreement reached between the GMR LTD Consortium India and the Upper Karnali hydropower project with a capacity of 300 MW to generate hydropower electricity in Nepal’s natural resources for a period of 30 years was in accordance with the legislation, and the project was based on the government’s policy of “Build, Operate, Own, Transfer” (BOOT).

Ramchandra Chaut and et al Vs. Government of Nepal, Office of the Prime Minister and Council of Ministers Kathmandu et al NKP 2066  No. 1 Decision N0. 8059 Page No. 85

In the writ petition filed by Ram Chandra Chataut 064-WO-0053, a precedent was established that the agreement reached on October 29, 2006 between the then Royal Government and the Multinational company based in Australia Snowy Mountains Engineering Corporation – SMEC and the West Seti River project agreement was not held as a contractual agreement between two countries or the agreement relating to the West Seti River project or the agreement relating to the distribution of multinational natural resources The aforementioned business contractual agreement required the company to generate hydropower electricity and sell it for a specified period of time. As a result, it cannot be said to have its uses and resources distributed.

Upper Naugaad small hydropower project with 8 MW capacity NKP 2075 Decision No. 10126 Page No. 844

Nandu Singh Dhami, the writ petitioner, is the president of the Naugaada interest committee and a resident of Darchula. The Appi Power Company Limited, with a capacity of 8 MW, failed to execute the agreement as specified below.

  • The wooden bridge was not replaced with a concrete bridge.
  • The motorable roads are not maintained.
  • Compensation will be paid based on the Land Revenue Office Darchula’s valuation.
  • Provide alternative employment opportunities to residents who rely on fishing for a living.
  • Monasteries and temples are safeguarded.
  • Construction of school buildings, as well as the construction and protection of a cremation area;
  • Make irrigation available.

The writ petition claimed that the agreement reached between one of the opponents, Appi Hydropower Limited, and the Ministry of Energy, Water Resources, and Irrigation was not in the best interests of the stakeholders and thus should be repealed.

The grounds argued in the rulings for dismissing the writ petition filed in the Supreme Court.

The petitioner’s (Nandu Singh Dhami’s) writ petition fails to establish explicitly what types of acts of the opponent contributed/constituted the petitioner’s rights violation as enshrined in the constitution and legal provisions. It raises issues such as the environment, water use, irrigation, local investment, and providing electricity to the locals.

It is unclear what type of act is not being carried out in accordance with the agreement reached on what date between the Ministry of Energy, Water Resources, and Irrigation.

Despite the petitioner’s claim of compensation, the petition does not clearly state who owned the said land and who was entitled to compensation.

It requires investment, time, and labor, and project developers and investors are discouraged, and not only can the situation be created, but it may disrupt other development works that are mobilized through hydropower generation.

The writ was quashed on the grounds that such projects provide employment opportunities to residents of all regions across the country. It is unacceptable to say that only residents of certain regions are entitled to employment opportunities while residents of other districts or provinces are denied equal opportunities.

Regarding the repeal of the company instead of updating the permission letter of the hydropower project survey.

In Nepal, the practice of halting the project after obtaining permission for the hydro project survey is on the rise. The practice of carrying decent hydropower projects in its bag is becoming more common. These brokers have registered the rivers and committed the act of selling them at high prices. In such cases, the time limit for the hydropower survey is 2 years, with a maximum time limit of 5 years. Topographical mapping, surface geological mapping, geophysical survey, construction material survey, hydrological studies, sediment sampling, and analysis are carried out over a two-year period. Following that, the said act of Geotechnical investigation progress details should be submitted.

Based on the Inception report, the following reports with the titles listed below must be submitted within two years.

  • Completed topographical survey and mapping
  • Ongoing hydrological studies
  • Analysis of Sediment Sampling is Underway
  • Geological Mapping on the Surface.
  • Including rock mass classification and discontinuity surveys. Nearly finished
  • geotechnical investigations
  • Audits and test pits: refractive indices surveys, drillings, and so on. Partly finished
  • In-Progress Construction Materials Survey
  • Seismological research will begin.
  • Design and optimization are currently being worked on.
  • Project evaluation is currently underway.

In the event that the above-mentioned reports are not submitted, the renewal is canceled.

In the event that the permission letter for the survey is revoked, the Supreme Court has issued an order for renewal. Prior to entering into a Power Purchase Agreement, hydropower companies should complete the following acts and submit progress reports to the relevant offices.

Geological survey Topographical, hydrological – Alternatives, Optimization, and Project Selection- Analysis, Design, Drawings, and Estimates- Feasibility Study Report- Interconnection Agreement, Power Evaluation/Impact Study,

Also, the claim of the Director/President Surya Bahadur KC, a resident of Pokhara Metropolitan City Ward-6, on behalf of Jhyamolangma Hydropower Development Company Pvt. Ltd., and the opponents Land Revenue Office and the Ministry of Energy, Water Resources, and Irrigation – it reads: The only agreement remaining to be reached with the Nepal Electricity Authority (NEA), the electricity buyer, in order to conduct Power Purchase Agreement should be allowed for renewal. NKP 2073 Decision No. 9615 Page No. 1266 Certiorari/Mandamus Writ 071-WO-0914 Mandamus was granted by the Court.

Similarly, in Writ Petition of Certiorari/Mandamus Writ No. 070-WO-0226 -Kumar Pandey, resident of Pokhara Metropolitan City Ward-6, who is the authorized person on behalf of the Him Concert Waint Venture and the opponent Government of Nepal and Ministry of Energy, Water Resources, and Irrigation, et al; The order of certiorari was issued because the applicant is unable to complete its work, the permission letter has not expired after 5 years, and the applicant has applied for the renewal of the survey permission letter.


Meanwhile, the Nepali government had reformed the policy to encourage private participation in power development. The Supreme Court has been supportive of Nepal’s hydropower development. Corporate Lawyer Nepal as been involved in a number of legal disputes involving hydropower. We have attorneys who are well-versed in hydropower law.        

f you need such legal assistance, please contact us at +977-9849517735 or info@corporatelawyernepal.com.np

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