Nepal | July 03, 2020

PAC instructs govt to furnish documents of Budhigandaki deal

Himalayan News Service
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Kathmandu, September 20

The Public Accounts Committee (PAC) of the Legislature-Parliament has instructed the government to furnish all the documents related to Budhiganaki Hydroelectric Project deal with the Chinese company — China Gezhouba Group Corporation (CGGC).

The last Cabinet meeting of the former prime minister Pushpa Kamal Dahal-led government had decided on May 23 to hand over the contract of Budhigandaki project to the aforesaid Chinese company under EPCF (engineering, procurement, construction and financing) contract and then energy minister Janardan Sharma had signed memorandum of understanding (MoU) on June 4.

However, the 1,200-megawatt Budhigandaki deal landed in controversy as the care-taker government had signed MoU with the Chinese company at the very last minute. The House panel suspects irregularities as the Dahal-led government handed over the national priority project to the Chinese company without conducting competitive bidding.

It is reported that Chief Secretary Rajendra Kishore Kshetri has already submitted the MoU to the Cabinet meeting and incumbent Cabinet of Prime Minister Sher Bahadur Deuba has also endorsed the Budhigandaki deal.

The PAC today also raised concerns over the bad reputation of the Chinese company, which was even black-listed during construction of Sanjen Hydropower Project, developed by the subsidiary company of Nepal Electricity Authority (NEA). Chilime Hydropower Project had terminated the construction contract and seized the collateral from CGGC. The same company has also taken more than a decade to complete the 30-megawatt Chameliya Project.

Another project, the 60-megawatt Trishuli 3A being developed by the same contractor was initially supposed to be completed by June 30, 2011. The deadline for the project has already been extended thrice — first to April 30, 2013, then by 26 months to June 30, 2016 and then again for another 34 months since the last deadline.

“We have directed the government to submit all the documents related to Budhigandaki deal because we are apprehensive about irregularities while the EPCF contract was awarded to the Chinese company,” said Dor Prasad Upadhyay, chair of the PAC.

The House panel has sought all the relevant documents of the deal within September 24. “We will summon the prime minister, energy minister and high-ranking government officials to discuss the Budhigandaki deal as the Deuba-led Cabinet has endorsed the decision of the earlier government,” said Upadhyay.

The government has handed over the EPCF contract to CGGC even in lack of EPCF guidelines. As per a study carried out by the French company — Tractebel Engineering (France) — the cost to develop 1,200-megawatt project is
expected to hover around Rs 260 billion.

The Dahal-led government was highly criticised for handing over the national priority project to the Chinese company, which could be developed through domestic resources. Experts have said that Nepal can build the project from its own resources through proper planning.

The government has already initiated the land compensation distribution to people of project-affected area. The land compensation and resettlement cost is expected to come to around Rs 50 billion.

A version of this article appears in print on September 21, 2017 of The Himalayan Times.

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