Decision to award the 1,200MW project to a Chinese company has essentially blocked the chances of benefit sharing with India
Kathmandu, July 26
Amidst the rising controversy of the previous government’s last minute decision to award Budhigandaki Project to a Chinese company — China Gezhouba Group Corporation (CGGC) — experts have said that the country should have stuck to building the project through its own resources while sharing irrigation benefits with India.
“As the southern neighbour India could reap huge irrigation benefits from the project, the government should have held a dialogue with India regarding the irrigation benefits and flood control measures to be put in place during the development of the multipurpose project,” said former chief secretary Dwarikanath Dhungel.
Speaking in the meeting of the Public Accounts Committee of the Legislature-Parliament here today, Dhungel said
that around one-third of the storage of Budhigandaki project would remain as dead stock. Of around four billion cubic metres of total storage, only 2.5 billion cubic metres would be utilised for electricity generation, as per Dhungel.
“Nepal has only around 55,000 hectares of arable land in lower riparian Nawalparasi and Chitwan districts, where the water from the Budhigandaki project can be used for irrigation.” However, the storage project could cater to the irrigation demand for around 700,000 hectares of land in India and thus, sharing the irrigation benefits with India could have been crucial, according to Dhungel.
However, experts have said that the previous government’s decision to award the 1,200-megawatt Budhigandaki Project to the Chinese company has essentially blocked the chances of benefit sharing with India.
The previous government had signed a memorandum of understanding (MoU) with CGGC to award the engineering, procurement, construction and financing (EPCF) contract, violating the established principle of global bidding, alleged Ratna Sansar Shrestha, an energy expert. “We have witnessed completion of many projects like the Kaligandaki and
Bhotekoshi projects, among others, at a much lower cost than that estimated for Budhigandaki.”
Shrestha was also sceptical of the Chinese company developing the project. “Even if CGGC moves ahead to develop the project, it will likely inflate the cost of the project heavily,” he claimed, adding that Chinese companies are notorious for inflating the cost of the projects.
Earlier, a French Company — Tractebel Engineering (France) — had estimated it would cost around Rs 260 billion to build the project.
The government had already initiated land compensation distribution to the residents of project-affected area. Land price has been fixed at Rs 525,000 to Rs 835,000 per ropani and the government has to acquire around 57,000 ropanis of land for the project. However, the government has yet to fix the land price in semi-urban areas like Arughat, Khahare of Gorkha district. Land compensation of the project is expected to hover around Rs 90 billion.
As per the agreement with CGGC, the government has to bear the cost of land compensation of the project-affected area.
Shailendra Guragain, president of Independent Power Producers’ Association Nepal (IPPAN), said that the government had started feasibility study of the Budhigandaki project around 25 years ago, but it has yet to move forward towards construction.
As the country has garnered the experience of developing 456-megawatt Upper Tamakoshi utilising its own resources, Budhigandaki could also be developed with the same model, he said. “We have to initiate some storage projects like Budhigandaki at the earliest to cater to the energy demand of the future,” Guragain said.
Public Accounts Committee has taken the view from the experts on Budhigandaki deal before summoning the concerned government officials involved in the deal, according to Dor Prasad Upadhyay, chairman of PAC.
A version of this article appears in print on July 27, 2017 of The Himalayan Times.