Wed, Nov 15, 2017 - Page 6 News List

Nepal scraps deal with Chinese company

Reuters, KATHMANDU

Nepal has scrapped a US$2.5 billion deal with China Gezhouba Group Corp to build the nation’s biggest hydropower plant, citing lapses in the award process, Nepalese Minister for Energy Kamal Thapa said.

“The cabinet has canceled the irregular ... agreement with Gezhouba Group to build the Budhi Gandaki hydroelectric project,” Thapa, who is also the nation’s deputy prime minister, said on Twitter on Monday 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 India to meet annual demand of 1,400 megawatts (MW).

In June, a Maoist-dominated coalition government awarded a contract to Gezhouba Group to build a 1,200MW plant on the Budhi Gandaki River to address acute power shortages.

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

Speaking in Beijing yesterday, Chinese Ministry of Foreign Affairs spokesman Geng Shuang (耿爽) said he was unaware of the reports, but said China maintains very good relations with Nepal and enjoys cooperation in many areas and projects.

Gezhouba did not immediately respond to a faxed request for comment and did not answer telephone calls.

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

Kathmandu has cleared a 750MW 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 Ltd — to build one hydropower plant each, capable of generating 900MW of power each, mainly to be exported to India.

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