Kathmandu, November 24
A few days after the government decided to cancel its deal with a Chinese firm to develop the 1,200 MW Budhigandaki hydro project, the Cabinet has decided to handover the project to the state-run power utility Nepal Electricity Authority.
Following a meeting of the Cabinet on Friday, Energy Minister Kamal Thapa told mediapersons in Kathmandu that the mega project will be developed by mobilising domestic resources. Thapa said a committee will be formed within 15 days to decide on the modality under which the project will be financed.
The government, last week, had decided to scrap the controversial agreement signed with the Chinese company, Gezhouba Group, for the construction of the project citing ‘irregularly and imprudently’. China had considered the project as a part of One Belt One Road upon Nepal’s request.
Earlier, a joint meeting of the Finance Committee and the Agriculture and Water Resource Committee of Parliament in September had told the government to scrap the deal citing the Chinese company was not efficient for the big project. The Cabinet led by CPN-Maoist Centre Chairman Pushpa Kamal Dahal on May 23 had decided to hand over the assignment to the Chinese firm.
Accordingly, the two sides had signed the agreement on June 4. Immediately after the agreement, voices had been raised that the deal was against national interests. Former Prime Minister and Naya Shakti leader Baburam Bhattarai had led various movements demanding that the project be constructed by Nepal itself with the domestic investment.
The Chinese company had said it would construct the project in engineering procurement contract with finance (EPCF) model. According to the model, the company itself would make investments in the project, which Nepal would pay back after the construction. The detailed project report has estimated that the project would cost Rs 250 billion.
Following the cancellation of the deal, India’s state-owned NFPC had also publicly expressed interest in bidding for the project.
