The company has not conducted the initial environmental examination

Kathmandu, July 21

Citing that Huaxin Cement Narayani Pvt Ltd did not conduct an initial environmental examination (IEE) of its cement plant and did not follow the terms and conditions of the agreement, a sub-committee of the Parliament’s Public Accounts Committee (PAC) has recommended the government to cancel a land lease deal it signed with the Nepal-China joint venture cement factory that is under construction in Dhading district.

The sub-committee led by Nepal Communist Party (NCP)’s lawmaker Lekh Raj Bhatta, has recommended that the public land rented to Huaxin Cement Narayani for 50 years should be vacated.

The sub-panel has also directed the government to take necessary action against those officials who were involved in signing the lease agreement.

The sub-panel, which presented its report before the PAC today, said that the cement manufacturer did not properly follow the terms and conditions of the agreement it signed with the Investment Board Nepal, the government agency that facilitates big-ticket foreign investment in the country.

Bhatta also informed that the company did not fulfil the commitments that it had earlier made to the government officials. “The company has failed to comply with the rules and regulations of the land lease agreement that it signed with the government and also has not conducted the IEE, so we have recommended the government to scrap the agreement.”

After receiving the sub-panel’s report, Bharat Kumar Sah, chairperson of PAC, said that the report will be presented to the full committee meeting and this meeting will decide further on what action needs to be taken against Huaxin Cement Narayani and submit it to the government. “The government needs to follow suggestions and recommendations of the committee.”

The Public Accounts Committee had earlier received a complaint that the company had not even conducted the initial environmental examination of the proposed plant and based on that complaint PAC had formed a panel to look into the issue.

The issue related to the IEE came to the limelight when the recent floods caused damages worth more than one billion rupees at the proposed construction site of the cement company.

Huaxin Cement Narayani is the second Nepali- Chinese joint venture in the domestic cement industry after Hongshi-Shivam Cement. The company is preparing to build its plant on 500 ropanis of land at Panikharka of Dhading.

Chinese investor Huaxin Central Asia Investment (Wuhan) Co Ltd will operate Huaxin Cement Narayani Pvt Ltd. The company will come into operation as per the agreement reached between Nepal and China — to establish a cement factory with investment of Rs 15 billion — during Prime Minister KP Sharma Oli’s visit to China in 2018.

The company has set a target to produce 3,000 tonnes of cement in the first phase. It has also been reported that the company will utilise local raw materials.