The Betan Karnali Hydropower Project, a 439 MW initiative under the Employees’ Provident Fund (EPF), faces an uncertain future despite over Rs 670 million already spent on preparatory work. The project has been stalled due to the conflict of interest and objections from the developers of the 900 MW Upper Karnali Hydropower Project, led by India’s GMR Group.

Betan Karnali has utilised Rs 670.53 million for various preparatory activities, including detailed engineering studies, environmental impact assessments (EIA), base camp construction, road expansions, test tunnels, and employee salaries. Detailed engineering studies alone accounted for Rs 228.4 million, the largest expense till date.

GMR has raised objections, claiming that the Betan Karnali project’s proposed reservoir level of 473.30 metres would adversely impact the tailrace of the Upper Karnali Hydropower Project. This could potentially lead to water being redirected towards its powerhouse, compromising its operations.

An official of GMR told New Business Age that some areas of Betan Karnali Project’s proposed site falls under the Upper Karnali Hydropower Project.

GMR has consistently refused to release this land for Betan Karnali’s construction citing its concerns. The company reiterated its opposition in a 2021 letter to the Ministry of Energy and other government bodies, asserting that it had never granted a No Objection Certificate (NOC) for the project.

Betan Karnali’s Managing Director, Krishna Prasad Acharya, argues that failure to proceed at the proposed site would jeopardise the project’s viability. He highlighted that using unused GMR-controlled land could generate an additional 100 MW of electricity for the state without affecting GMR’s operations.

Acharya further noted that relocating the project downstream would interfere with the planned 10,800 MW Karnali Chisapani project. He also acknowledged that bypassing GMR’s concerns during the EIA approval process has led to challenges in obtaining construction permits.

Despite GMR’s objections, the Department of Electricity Development (DoED) and the Ministry of Forests and Environment approved Betan Karnali’s EIA report in January 2024. However, the DoED has indicated that Betan Karnali must secure GMR’s consent to move forward.

A Ministry of Forests and Environment official stated that EIA approval does not preclude potential impacts on other projects. The official urged both stakeholders to engage in discussions to resolve the dispute.