Nepal scraps hydropower project deal with Chinese firm

KATHMANDU: Nepal has scrapped a $2.5 billion deal with China Gezhouba Group Corporation to build the country’s biggest hydropower plant, citing lapses in the award process, the energy minister said.

“The cabinet has cancelled the irregular... agreement with Gezhouba Group to build the Budhi Gandaki hydroelectric project,” Energy Minister Kamal Thapa, who is also the country’s deputy prime minister, said on Monday in a twitter post in Nepali after a cabinet meeting. He did not give further details. Nepal’s rivers, cascading from the snow-capped Himalayas, have vast, untapped potential for hydropower generation, but a lack of funds and technology has made Nepal lean on neighbour India to meet annual demand of 1,400 megawatts (MW).

In June, a Maoist-dominated coalition government awarded a contract to China Gezhouba Group Corporation to build a 1,200 MW plant on the Budhi Gandaki river, about 50 km (32 miles) west of Kathmandu, to address acute power shortages.

Critics say the $2.5 billion project was handed to the Chinese company without any competi- tive bidding, which is required by law, and a parliamentary panel asked the government that succeeded the Maoist-led coalition to scrap the deal.

Speaking in Beijing on Tuesday, Chinese Foreign Ministry spokesman Geng Shuang said he was unaware of the reports but said China maintained very good relations with Nepal and enjoyed cooperation in many areas and projects. Gezhouba did not immediately respond to a faxed request for comment and did not answer telephone calls. Full story @ timesofoman.com/business