Awarding the Budhigandaki project to a particular firm without competition is violation of law

The proposed 1,200-MW Budhigandaki hydel project has once again landed in fresh controversy after a Cabinet meeting on September 14 decided to award it to China Gezhouba Group Company Ltd (CGGCL). PM Oli decided to directly award it to the Chinese firm before leaving for an unjustifiably prolonged visit to North and Central Americas. No global tender was called for the multi-billion rupee project. The Oli-led government reversed the decision of the Sher Bahadur Deuba-led government, which had scrapped the deal with the Chinese firm nearly one year ago. It may also be noted that the Budhigandaki Project was awarded to the same controversial firm previously by Pushpa Kamal Dahal-led coalition on May 15, 2017, one week after he resigned from office to pave the way for the formation of a new government to be led by Deuba. The Deuba-led government, which had earlier endorsed the deal signed by then Energy Minister Janardan Sharma in the presence of Dahal, ultimately decided to scrape the Memorandum of Understanding (MoU), saying that bidding process was not competitive, it lacked transparency and flouted the Public Procurement Act.

It may also be noted that then parliamentary Finance Committee and Natural Resources and Agriculture Committee had simultaneously asked the government to cancel the deal with CGGCL, urging the government either to build it using its own resources or follow the international bidding process as required by the law. The Deuba-led government also asked the Nepal Electricity Authority to proceed with developing it in a company model just like the Upper Tamakoshi Project. On July 15, CGGCL submitted a new MoU to the Prime Minister’s Office to build it at the cost of Rs 300 billion under engineering, procurement, construction and financing model. A study carried out by France’s Tractebel Engineering had estimated Rs 260 billion for the project in 2011.

Minister for Energy, Water Resources and Irrigation Barshaman Pun on September 23 said the Office of the Prime Minister and Council of Ministers decided to hand over the project to the Chinese firm through negotiations as it would generate the fund required for the project. Pun has also expressed the government’s inability to build it using domestic resources. However, a study team led by Swarnim Wagle, then NPC vice-chairman, recommended on December 18, 2017 that it could be built by utilising local resources. The government has so far generated Rs 24 billion in the last three years by raising Rs 5 on every litre of petrol from customs points to build it using the domestic resources. This amount could reach up to Rs 165 billion by the time the project kicks off. Both the factsheets prove the government’s claim that Nepal cannot build the project on its own wrong. If we cannot build it on our own, we can find other modalities as well and call an international bidding in which CGGCL may also take part in the process. The Budhigandaki project, it seems, has become the victim of domestic politics whose future is hanging in the balance. Awarding a project of such a large scale displacing over 8,000 families in Gorkha and Dhading to a particular firm without competition is a sheer violation of law. It must be rectified.

Clear up confusion

With federalism already adopted, people had high hopes that now the country would move from unitary system of governance, thereby bringing state services and facilities to their doorsteps. But while lack of staff has hampered service delivery, there seems to be utter confusion regarding fiscal transfer and utilisation and instructions. For example, in Ramechhap district, staffers of around half a dozen government offices have not been able to perform their duties for what they say lack of clear instructions from line agencies.

It has already been two months since the start of the new fiscal year, but officials at Urban Development and Building Construction Division, Water and Sanitation Office, District Land Conservation Office, District Technician Office don’t yet know how and where they will be adjusted. Federalism is a new practice in Nepal, but this does not give the leeway to keep everything in confusion. The federal and provincial governments must work in tandem to clear the confusions so as to facilitate swift implementation of federalism. Only then will the people be able to enjoy the fruits of federalism.