US$1200 million project in the Far Western Region now on fast track to implementation, with construction targetted to start before the end of the year.

Mr. William Bultitude, the Managing Director of West Seti Hydro Ltd. (WSH) briefed a crammed gathering of about 80 Nepali parliamentarians and government officials last night on this flagship project that will bring major benefits to Nepal and the Far West Region in particular. After more than 20 years of study, investigation, research, negotiation and hard bargaining this complex project is coming to fruition he said.

Mr. Bultitude gratefully acknowledged the support and commitment given by the Eight Party Alliance in unanimously supporting the Project and agreeing to the Government of Nepal taking a 15% equity stake in the Project.  This equity stake will be funded by a loan from the Public Sector Window of the ADB.  During the period of the Generating Licence to be granted to WSH, the Government of Nepal will receive an estimated financial return of US$1122 million (royalty payments, revenue share, taxes and dividends) from the Project.  At the end of the licence period, the Project will be handed over to the GoN in good working order and is expected to continue to generate electricity for at least another 30 years.

Mr. S Chander, Deputy Director General of the Asian Development Bank, acknowledged, at the same gathering, that they had now received from WSH the Summary Environmental Impact Assessment for the Project, including the 400 kV transmission line from Talkot to Mahendranagar and it is expected that after due review by ADB, this would be posted on the ADB website shortly.

The full Environmental Impact Assessment Report, which will be available shortly, will set-out in detail how WSH will deal with resettlement of the 1579 families likely to be displaced by the Project.  The Resettlement Programme and the Environmental Management Programme will be undertaken in strict accordance with international standards and with full consultation within the 6 Districts affected, the Local and Village Development Committees, the Ministry of Environment, Science and Technology and an Evaluation Panel of independent internationally acclaimed experts.  The implementation of these two programmes is expected to cost between US$100 and US$150 million and this will form part of the overall project cost.  SMEC, the project sponsor, is establishing a local construction company, Westseti Constructions Pvt. Ltd. that will undertake the great majority of this work, creating new job opportunities in Nepal, particularly in the Far Western Region, and establishing a new major construction company that will benefit from skills and knowledge transfer.

The 750 MW hydroelectric Project, with its power station to be sited in a huge underground cavern about 40km north-west of Dipayal, will produce more electricity each year than is consumed across the whole of Nepal.  The electricity is to be sold to PTC (India) Ltd. under a take- or-pay arrangement for 25 years from the start of Commercial Operations.  Not only will the Project create up to 3000 jobs in the locality during the 5.5 year construction period but there will also be 500 jobs created throughout the 25 year operating period.  The Project will also incorporate an 8 MW power station that will be connected directly to the NEA grid to provide much needed power in the region, sufficient for about 25 thousand households, local industry and commerce.

WSH has also given a firm commitment to provide a programme of Technology and Skills Transfer, an Education and Training programme (including on-job training) and to insist on a policy of preferential selection of job applicants from the Far West Region by the construction contractors.  It has also given a commitment to inject US$10 million into the improvement of infrastructure (roads, rural electrification, water supply and sanitation) in the region.

END.

Not for release before 17.30 hrs on 6 July 2007
For further information please contact:
Mr. Gopal Singh,
Company Secretary

West Seti Hydro Ltd
Post Box No. 3338
1611, Lamtangin Marg
Maharajgunj, ward no. 4 
Kathmandu, Nepal

Telephone No: 977-1- 4721529, 4720276, 4720955, 4720328
Fax No: 977-1-4720587
e-mail: westsetihydro@wlink.com.np

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