NEPAL AWARDS $2.5BN POWER PROJECT TO CHINESE FIRM

KATHMANDU : On its last day in office, the Pushpa Kamal Dahal “Prachanda” government of Nepal has awarded a contract to construct the 1,200MW Budhi Gandaki Hydroelectric Project to a controversial Chinese company, without any competitive bidding.

The last cabinet meeting held on Tuesday -- a day before Prachanda stepped down as prime minister-- approved the energy ministry’s proposal to let China Gezhouba Group Corporation (CGGC) build the project on the Budhi Gandaki River in Gorkha and Dhading districts.

Touted as a project to end the perennial power shortage in the country, it will be built under the engineering, procurement, construction and finance model, with an estimated cost of exceeding $ 2.5 billion.

Though there are accusations that Prachanda was pro-India, some of his decisions favoured Beijing, raising eyebrows in New Delhi. Nepal signed a framework agreement on China’s ambitious One Belt One Road and joint military exercise with China during his short tenure. CGGC is a controversial company and has a bad track record in Nepal, having left one hydro power project in limbo and put political pressure to increase the generation capacity of another.