Kathmandu, June 21

Stakeholders have urged the government to scrap the deal of Budhigandaki Hydropower Project with Chinese Company — China Gezhouba Group Corporation (CGGC) — which was signed by the previous government, and develop the project with Nepal’s own resources.

Speaking during an interaction programme organised by Naya Shakti Party Nepal on development model of Budhigandaki project here today, political leaders, people from project-affected area and experts expressed concern over the previous government’s last-minute deal with CGGC without carrying out competitive bidding and also questioned the Chinese company’s capacity to develop the project.

A Development Committee model was initiated since 2011 to develop the 1,200-megawatt Budhigandaki Hydropower Project. The Budhigandaki Hydroelectric Project Development Committee (BGHEP) has already carried out detailed design of the project through Tractebel Engineering (France), which has estimated it would cost around Rs 260 billion to build the project. The BGHEP has also already prepared the tender document to award the construction contract.

However, the previous government had signed memorandum of understanding (MoU) with CGGC to develop the project under engineering, procurement, construction and financing (EPCF) model even as the engineering works of the project have already been initiated through the development committee model.

In the programme, Chin Kaji Shrestha, chief whip of Nepali Congress, said the deal is controversial and has pushed the fate of the project towards uncertainty. He stressed that the government should clear the land compensation process at the earliest and develop the project through its own resources.

Citing 456-megawatt Upper Tamakoshi Hydropower Project (UTHP) being developed with Nepal’s own resources, Anand Pokharel, who belongs to CPN (UML) party, said that the Budhigandaki could also be developed with the country’s resources utilising the experiences of UTHP.

The previous government’s decision to handpick the Chinese company to develop Budhigandaki is against the provision of the Constitution. Citing provision of Article 59 (5) of the Constitution, which has ensured certain investment to the local communities in development of natural resources, Pokharel said the EPCF contract with CGGC is against the constitutional provision.

Laxmi Prasad Devkota, former chairman of BGHEP, said that it would be misleading to think the project has been awarded to the Chinese company due to lack of resources within the country. “Capital and expertise are not the constraints for Budhigandaki project because around Rs 50 billion could be borrowed from banks and financial institutions, similar quantum of the amount from the Employees Provident Fund, Citizen Investment Trust and other various funds of the government, around Rs 30 billion from public by issuing shares and around Rs 50 billion to Rs 60 billion from external commercial borrowing or from efficient management of remittances, among others,” said Devkota.

Budhigandaki project is in close proximity with load centres like Kathmandu, Pokhara and Chitwan, and will have very low transmission cost, as per Devkota. He terms the deal with the Chinese company ‘suspicious’ as apart from the fact that the project has been awarded to a Chinese company without any bidding process, ‘the previous government has awarded the project to be developed in EPCF, but we don’t have any guideline in place for this kind of contract’.

Individuals from project-affected area also sought suitable model to develop Budhigandaki, in which they also could invest in shares.