June 29: The government has finally decided to build the Budhi Gandaki Hydropower Project with domestic investment. In this regard, the government is planning to set up a company to initiate the construction of the national pride project.

A meeting of the cabinet held on Tuesday agreed in principle to endorse the proposal forwarded by the Ministry of Energy, Water Resources and Irrigation to build the project with domestic investment and also to establish a company for the construction of the project.

The project was halted for a long time as the government was not able to take a concrete decision on whether to construct the hydropower project with a total capacity of 1,200 MW with domestic investment or hand it over to a foreign company.

According to a minister who attended the cabinet meeting, the government has taken the decision to establish the Budhi Gandaki Hydropower Development Company Limited to undertake the project.

In 2014, a French company had prepared its detailed project report and submitted it to the government. The government has so far distributed compensation worth Rs 40 billion to those affected by the project.

The Nepal Oil Corporation (NOC) has already collected more than Rs 70 billion by levying infrastructure tax for such projects. However, NOC has stopped collecting tax under this heading recently.

The project, which will affect about 50,000 people in the former 25 VDCs of Dhading and Gorkha, is also considered important for Nepal's energy security.

Minister for Energy, Water Resources and Irrigation Pampha Bhusal, while replying to a question raised by the lawmakers on the Appropriation Bill for the upcoming fiscal year in the National Assembly on Monday, informed that the Budhi Gandaki Hydropower Project is being constructed in a company model.

The board of directors of the company will have representatives from the government including one secretary from the Ministry of Energy, one Gazetted First Class Officer each from the Ministry of Energy and Ministry of Finance, an executive director of Nepal Electricity Authority and an independent operator. One woman representative has been made mandatory for independent management of the company.

The company's authorised capital will be equal to Rs 60 billion. The capital has been divided into a total of 600 million ordinary shares at Rs 100 per share. The Ministry of Finance will have a share equal to 25 per cent of the company’s total shares or 150 million units. Similarly, the Ministry of Energy will own 40 per cent of the shares or 240 million lots.

NEA will have a 14 per cent share that means 84 million units. Similarly, 10 per cent of the locals will get 60 million units of shares, and the general public will be eligible to apply for other 60 million units of shares.