Tuesday, August 19, 2014

My role in signing Khimti PPA

Mr. Bijaya Man Sherchan, a prominent hydropower entrepreneur, has stated in his email circulated through NNSD that my role “as a signatory in the Khimti PPA has raised questions about both your credibility and your professed nationalism.”

But the statement seems to have been made without knowing full facts.

In the legal sense of the term “signatory”, I wasn’t a signatory of Khimti PPA at all. I had signed the document merely as a “Witness”. If there is an accident and some people happen to “see” it first hand and police investigating the accident will require those people that have witnessed the accident to sign a legal document that police will prepare as “witness” which will not make the people that witnessed the document responsible for the accident itself.

Similarly, in the legal world millions of documents (MoUs, agreements, contracts, etc.) are signed every minute and most of those documents have provision for signature by witnesses. The people that sign such documents as witness aren’t held responsible no matter what.

Moreover, at that time I was an employee of HPL as a Company Secretary and had “witnessed” the PPA in the capacity of a company secretary. The people in the corporate world including banking sector know full well what authority a company secretary possesses. It is never for the company secretary to decide what document should be signed, what rate should be fixed, etc. A company secretary is mainly and solely responsible to keep record of board resolutions, called minutes.

Late Mr. F Peter Harwood had signed Khimti PPA in the capacity of general manager of HPL. He is the signatory of Khimti PPA on behalf of HPL. However, the people in the corporate world also know that even CEOs, MDs, GMs etc. do not have authority in policy matters which are decided by the board of directors – pricing policy (tariff rate) also lies in the jurisdiction of Board of Directors and even HPL GM had to sign PPA according to what HPL board of directors decided.

In the corporate world when CEOs, MDs, GMs etc. differ with the board of directors they either get sacked or are forced to resign. This will also indicate what level of authority a company secretary holds when even CEOs, MDs, GMs etc. have no authority to disagree with the board of directors. Basically, it is the owners’ wishes, expressed through board resolutions that govern an important document like PPA.

Moreover, at that time Norwegian company Statkraft SF held 75% equity in HPL and everything including PPA was decided by Statkraft in Norway and HPL board merely had to implement the decisions made in Norway. It was the owners that called the shot as it always happens in the corporate world.

In this background holding a company secretary responsible for his “despicable” role in having witnessed Khimti PPA doesn’t sound logical.

Furthermore, I don’t hold any beneficial interest in Khimti or HPL (I don’t own any shares, don’t stand to gain or benefit or anything as such). The owners of HPL are still enjoying the fruits of so called bad PPA for NEA but nobody seems to hold them responsible.

I actually resigned in disgust from HPL on the matter of principle (which I will make public at appropriate time) in late 1998.

Most importantly the main PPA was signed in March 1994 in which provisions like USD denomination, escalation based in NY CPI and many more provisions, described now harmful to NEA were included in the original PPA. Whereas, I joined HPL only in May 1994, two months after signing of the PPA. What I had “witnessed” was merely an amendment which raised the tariff by 14% keeping all other “harmful” clauses intact.

Therefore, the allegation of my “despicable” role in Khimti PPA is not based on valid ground.

2 comments:

Adams Kevin said...

मेरो नाम केभिन एडम्स, बंधक ऋण उधारो एडम्स तिर्ने कम्पनी को एक प्रतिनिधि, म छ
2% ब्याज मा ऋण दिनेछ। हामी विभिन्न को सबै प्रकार प्रदान
2% ब्याज मा ऋण प्रदान गर्दछ। हामी ऋण को सबै प्रकार प्रदान। यदि तपाईं सम्पर्क अब यो इमेल एक ऋण आवश्यक adams.credi@gmail.com:

Cva Shrestha said...

Dear Sir

kindly mention the Penalties for not meeting energy generation in this PPA?
I mean to say..
what is the penalty if the HPP fails to deliver the Contract Energy (monthly)