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OPEC’s Premature Victory Lap

OPEC’s Premature Victory Lap

OPEC’s meeting on Friday did…

Nepal and Bangladesh to Establish Joint Venture 3,000 Megawatt Power Plant

There is a tendency when considering massive power projects in the Third World to view them as ventures in which the host countries lack expertise, capital, or both, necessitating outside investment and know-how.

Such is not always the case, however.

Dhaka’s The Daily Star newspaper is reporting that on 30 January Nepalese Finance Minister Barsha Man Pun proposed establishing a 3,000-megawatt power plant in its territory in a joint venture with Bangladesh, making the pitch at a meeting with Bangladeshi Finance Minister AMA Muhith at the latter's secretariat office while attending the South Asian Association for Regional Cooperation (SAARC) finance ministers' meeting.

In addition, broadening the proposed cooperation, Pun asked the Bangladeshi government to allow transit of Nepali goods from Mongla to Bangladesh’s Banglabandha land port in the country’s northwestern Panchagarh district.

The government of Bangladesh developed Banglabandha as an inland port to provide a trade link with India, Nepal and Bhutan, with facilities including customs offices, banking, warehouses, police and immigration posts. The three nations are separated by 32 miles of Indian territory, the Siliguri Corridor.

Discussing the power project with reporters after the meeting, Muhith said that Nepal was willing to export power to Bangladesh, but for that to happen, Bangladesh would need to be an equity partner in the proposed joint-venture power plant in the Himalayan country, noting that while Nepal has huge resources for hydropower, its potential has remained untapped up to the present for lack of investment.

According to the Nepalese government, the country's total hydropower potential is 83,000 megawatts, of which 42,000 megawatts is capable of economic development.

Such a project would dovetail neatly with Bangladesh’s chronic electricity shortages, as according to Bangladesh’s Power Development Board, the country’s current domestic production of 5,000 megawatt meets the needs of less than half the country’s population.

The power plant and Banglabandha initiatives are part of a broader effort by Kathmandu to end its geographical isolation, which Pun made clear at the SAARC meeting, where Pun told his audience that closer economic integration in the SAARC region can only be achieved by strengthening physical infrastructure especially by developing roads and rail corridors between and among the SAARC member states, commenting, “the Thimphu SAARC summit had underscored the need for collaborative efforts to achieve greater intra-regional connectivity,” he reminded, adding that the year 2010-2020 has also been declared as the ‘Decade of Intra-regional Connectivity in SAARC.’ The region needs to work harmoniously for closer economic integration in terms of monetary and fiscal measures like currency convertibility, common custom union, harmonisation of standards, and reduction of tariff and non-tariff barriers, and most importantly investment promotion in key economic sectors in the region for the common goal.”

Bangladesh Prime Minister Sheikh Hashina, who also attended the SAARC summit, commented, “The SAARC Development Fund is a manifestation of the commitment to move SAARC process forward, with project based approach, so that the region will be able to deliver direct benefits to its people.” Speaking of Bangladesh’s power problems Hashina noted that South Asia is suffering from an ongoing energy deficit which hobbles efforts to sustain economic growth adding, “to meet the ever increasing energy demand, a comprehensive and holistic approach is required for the development of renewable and alternative sources of energy available in the region.” Hasina urged the SAARC minister to speed up the concept of the “SAARC Energy Ring” and regional energy trade, currently under study by the SAARC Experts Group, who should develop concrete project proposals for implementation.

While deepening Nepali-Bangladeshi energy ties is of clear benefit to both countries, much remains to be done over Nepali access to the Banglabandha land port, as currently trucks from Nepal are only allowed to travel up to 125 miles inside Bangladesh. Seeking to facilitate the issue, last month the Bangladeshi government formed a committee to make recommendations on the transit issue, which subsequently submitted its report to the Commerce Ministry. According to Muhith, the recommendations include giving the three neighboring countries access to the facility on the basis of flat-rate transit fees, adding that some concessions might be offered to low-income countries. Muhith concluded by noting that the committee's report will be sent to the three countries and transit fees and other issues will be settled through discussions with them.

It is quite refreshing to see less than prosperous countries pooling their resources and initiatives to resolve common problems rather than waiting for international organizations to intervene, who often have their own agendas, which frequently are at odds with the host countries’ interests. According, one can only wish Kathmandu and Dhaka well.

By. John C.K. Daly of Oilprice.com



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