Nepal Scraps Chinese Hydropower Projects

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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 in a Twitter post in Nepali after a cabinet meeting. He did not give further details.

Nepal Energy Minister Kamal Thapa on Twitter

What Energy Minister Kamal Thapa said in his tweet – “There is no politics in cancellation of Budhi Gandaki hydel project – This is not against of any institution or people – It is the decision of parliament affairs committee – Now this project will be under Investment Board of Nepal and energy ministry”.

Nepal’s rivers, cascading from the snow-capped Himalayas, have vast, untapped potential for hydropower generation, but lack of funds and technology have made Nepal lean on neighbour India to meet annual demand of 1400 megawatts (MW).

Budhi Gandaki view from the suspension bridge in Arughat, Nepal. © Ganesh Shrestha

In June, a Maoist-dominated coalition government awarded a contract to China Gezhouba Group Corporation to build a 1200 MW plant on the Budhi Gandaki River, about 50 kilometres (32 miles) west of Kathmandu, to address acute power shortages.

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

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

Officials of the Chinese company were not immediately available for comment.

China and India jostle for influence with aid and investment in infrastructure projects in Nepal.

Kathmandu has cleared a 750 MW project to be built on the West Seti River in the western part of the country by China’s state-owned Three Gorges International Corp.

It has also permitted two Indian companies — GMR Group and Satluj Jal Vidyut Nigam Limited — to build one hydropower plant each, both capable of generating 900 MW of power each, mainly to be exported to India.

© Reuters

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