US embassy cable - 03KATHMANDU1978

C O N F I D E N T I A L KATHMANDU 001978 
 
SIPDIS 
 
STATE FOR SA/INS 
LONDON FOR POL - GURNEY 
NSC FOR MILLARD 
 
E.O. 12958: DECL: 10/13/2013 
TAGS: PTER, ASEC, ENRG, EINV, CASC, NP, Maoist Insurgency 
SUBJECT: NEPAL:  HYDROPOWER PLANT WITH US INVESTMENT TO 
REOPEN AFTER FEAR OF MAOIST ATTACK 
 
Classified By: DCM ROBERT K. BOGGS.  REASON:  1.5 (B,D). 
 
1.  (C)  After Nepali Army intelligence of an impending 
Maoist attack forced its temporary shutdown on October 12, 
the Bhote Koshi hydrolectric power plant will resume full 
service late on October 14.  Sam Nott, the American plant 
manager, says he expects all staff to return to the site and 
the 36 MW plant to be fully operative at about 5:00 p.m. 
local time. 
 
2. (C)  Nott said the decision to close the plant and call 
its seven personnel back to Kathmandu followed information 
received from the Royal Nepal Army (RNA) early on October 12 
that Maoist insurgents might be planning an attack in the 
vicinity.  According to Nott, the RNA said it had obtained 
information from two independent sources that a known Maoist 
operative had been observed apparently scouting around the 
Bhote Koshi area.  (Since late 2001 the RNA has maintained a 
reinforced platoon of 75 soldiers to provide security for the 
plant, which is located in Sindhupalchowk District, about 110 
km northeast of Kathmandu.  With the exception of Nott, whose 
family lives in Kathmandu, all other employees are Nepali. 
End note.)  Although the RNA had advised against closing the 
plant, asserting its troops could provide adequate security, 
Nott said management had decided to err on the side of 
caution with the temporary shutdown, which began at 1:30 p.m. 
local time on October 12. 
 
3.  (C)  Nott said he believed that in the intervening 45 
hours the RNA, had succeeded in flushing out any Maoists in 
the area who might have been planning an attack.  He reported 
that a 17-man RNA patrol (sent to augment the reinforced 
platoon following the tip-off about a possible attack) 
briefly clashed with "a small number" of suspected Maoists on 
a cliff overlooking the plant late on October 12.  One RNA 
soldier was wounded by a socket bomb during the engagement; 
it was unclear if the Maoists suffered any casualties.  Nott 
said he had been told that the patrol recovered socket bombs 
and pressure cooker bombs from the site.   Since subsequent 
patrols have uncovered no evidence of Maoist activity, 
company management decided to reopen the plant. 
 
4.  (C)  Although U.S. investors hold a 90 percent share in 
the plant (which represents the largest single U.S. 
investment in Nepal), Nott said he believes the RNA 
detachment, rather than the plant itself, was most probably 
the Maoists' target.  Despite the Maoists' continuing 
anti-American rhetoric, Nott noted that neither plant 
management nor, as far as he knows, any individual employees 
have received any threatening letters or extortion demands 
from the insurgents.  Because the road from Kathmandu to the 
plant is comparatively well traveled, he does not believe 
that the Maoists will mine the road (as they did the road to 
a German power plant in Lamjung District on October 1). 
Nonetheless, he said that plant management is varying the 
times of its shift changes and is renting vehicles--rather 
than relying on the readily identifiable Land Rovers 
habitually used by the plant--to ferry employees and supplies 
back and forth.  As the lone American on site, he will 
continue to "keep a low profile," he said, adding that he 
frequently travels by motorcycle in order to appear like a 
tourist. 
 
5.  (C)  Comment:  Nott seemed confident in the RNA's ability 
to maintain security around the plant and expressed no fear 
about returning to the site.  He undertook to contact the 
Embassy if he perceives conditions are deteriorating.  The 
Embassy maintains frequent contact with company management 
and will continue to monitor the situation. At least for now, 
we have no evidence that the hydroelectric plant or its US 
investors were the target of any attack being planned. 
 
MALINOWSKI