Govt scraps Budhigandaki deal with Chinese contractors

KATHMANDU: The government on Monday scrapped the contract awarded to China’s Gezhouba Group for the construction of much awaited Budhi Gandaki Hydropower Project citing lack of transparency and legal requirements.

A meeting of the Council of Ministers held in Singhadarbar today decided to scrap the construction contract of the 1,200 MW national pride project as per the direction by parliamentary committee earlier.

The project was supposed to be developed in Engineering, Procurement, Construction and Financing (EPCF) model, as per which, the concerned construction company itself generates the required fund for the project.

The Pushpa Kamal Dahal led government had handed over the Budhigandaki project to the Gezhouba Water & Power (Group) Co Ltd (CGGC) company. The then Minister for Energy Janardan Sharma had signed a memorandum of understanding (MoU) on June 4 in that regard.

The deal landed in controversy as the MoU was signed breaching the general principle of competitive bidding in accordance with procurement rules.

As per a study carried out by a French company — Tractebel Engineering — the cost of developing the 1,200-megawatt project is expected to be around Rs 260 billion.

Experts believe that Nepal can build the project with its own resources through proper planning.