Hindustan Times (Jalandhar)

Nepal kills deal with China firm for hydro project

- Anil Giri letters@hindustant­imes.com

KATHMANDU: Nepal on Monday scrapped the award of a 1,200-MW hydropower project to a Chinese state-owned company, dealing a blow to Beijing’s ambitions to take on key infrastruc­ture schemes in the country.

A meeting of the cabinet decided to scrap the agreement for the Budhi Gandaki hydropower project with Gezhouba Group on the directive of several parliament­ary committees.

The move followed allegation­s of corruption, and deputy prime minister Kamal Thapa tweeted that the agreement was signed “recklessly and shadily”.

The move comes at a time when the Sher Bahadur Deubaled government is under pressure from China to move ahead with projects under the Belt and Road Initiative (BRI).

The cabinet also decided to give two Indian firms – GMR Energy and Sutlej Jal Vidyut Nigam – developing 900-MW hydropower plants six more months for financial closure of the projects.

At one time, the Nepal government had considered including the Budhi Gandaki project, estimated to cost more than $2.5 billion, in the BRI.

There was widespread speculatio­n in Kathmandu that Prime Minister Deuba took the bold step to signal to China that Nepal will not be pressured into developing projects under the BRI at a time when several communist parties have joined hands for the upcoming elections, reportedly with the backing of Beijing.

Gezhouba Group was awarded the contract to build the project on the “engineerin­g procuremen­t contract with financing (EPCF)” model, which was to be implemente­d for the first time in Nepal.

The firm, which has been black-listed in Nepal, has also faced criticism for delays in other projects.

The decision to award Gezhouba the contract was first opposed by former premier Baburam Bhattarai, whose hometown is in the Gorkha region where the project is located. Several political parties and Nepalese energy entreprene­urs too opposed the deal even though the government has distribute­d more than Rs 12 billion as compensati­on for land acquisitio­n.

THE PRACHANDA GOVT GAVE THE CONTRACT FOR THE BUDHI GANDAKI PROJECT TO THE GEZHOUBA GROUP DURING HIS LAST DAYS IN OFFICE WITHOUT ANY COMPETITIV­E BIDDING.

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