Kathmandu, January 17
Months after scrapping the Budhigandaki Hydropower deal signed with China’s Gezhouba Group, the government of Nepal is planning to cancel the agreement signed with China Three Gorges International Corporation for the construction of West Seti Hydropower Project.
On the other hand, the Chinese firm has also expressed its dissatisfaction over the power purchase rate policy proposed by the Investment Board Nepal and is planning to pull out.
The company wrote a letter to the Board in December last week last year to inform that it is not willing to go ahead with the project under the conditions proposed by the board.
Following the response, the Board has made up its mind to cancel the deal, according to an official there. He says the Board will soon reply to the letter with a warning that the contract is being cancelled.
The company argues that Nepal’s proposals make it impossible for the company to invest in the “difficult project in field of technology and construction as well.”
“If Nepal Government or NEA [Nepal Electricity Authority] does not like to revise the Power Purchase Rate policy in order to improve the economic conditions of the project, the project will become economically infeasible according to the result we carefully calculated,” the letter reads, “Therefore, it becomes no necessary to consider any next work plan or action.”
