KATHMANDU, Nov 19: Works of Budhigandaki Hydroelectric Project have remained at a standstill for at least the last six months, particularly due to controversies over handing over the project’s contract to a Chinese company.
A fresh controversy seems to have erupted after the government, on Monday, scrapped the contract with CGGC. It may further delay the project implementation, and more uncertainties will grip the national-pride project of 1200 MW, which is key to addressing the power crisis of the country.
Former government led by Pushpa Kamal Dahal had abruptly awarded the project to a Chinese company on June 5, few days before Dahal stepped down. The academia and the media criticized the government for breaching law in doing so. Later in September, two parliamentary committees - finance, and agriculture and water resources -- directed the government to scrap the decision for it lacked competition and breached public procurement laws.
On Monday, current government scrapped the project award decision and fresh controversy has erupted between the government and opposition parties. The fresh dispute means real works in the project development will not take momentum anytime in near future.
Distribution of compensation to the displaced people in the affected area has started and the project is in a state of ready-to-go with already prepared DPR and contract documents. But the government is silent on further action on the project after scrapping the contract.
CPN-UML Party Chairman KP Sharma Oli on Friday slammed the decision saying the election government has no authority of scrapping the license and awarding to someone else.
On the same day, Chinese Ambassador to Nepal, Yu Hong, who was also present during the contract signing at Baluwatar on June 5, has called for policy stability in Nepal to further promote trade and investment between the two countries. The ambassador’ statement has been taken as a diplomatic expression of discontent over the decision.
Hare Ram Dhakal, coordinator of Budhigandaki Stakeholders Committee, said that there has been no work at all since the project was contracted to the Chinese company. “We have nothing to say whom the government awards the contract, but we want to see the project generate electricity,” added Dhakal. Local households of 3,560 families of 14 VDCs of Gorkha and 13 VDCs of Dhading districts will be displaced by the dam.
The families have demanded quick distribution of compensation and asked the government for expediting the project works. “We have voluntarily agreed to provide land to the government for the project. We have been asking for fast distribution of the compensation,” said Dhakal.
Former energy secretary Surya Nath Upadhyaya said that the contract decision has now been corrected as a right move. But he expressed doubts whether the changing governments prioritize the project and keep a stable policy.
President of Independent Power Producers’ Association Shailendra Guragain has a different take on both decisions. “The contract has been scrapped in a similar way as it was signed. Both the decisions are immature and gives a message that Nepal is unstable for investment,” said Guragain, fearing it may have an adverse impact toward bringing in foreign investment.
“The project must not be delayed and there is no room for dillydallying in this project, the government should build it on its own,” said Upadhyaya, adding that project implementation of this scale gives the country a confidence to address power crisis.
Commenting on whether the government may award the contract to any Indian company, Upadhyaya said contracting the project to another Indian company will be another big mistake, as Indian companies too have not delivered in the case of Upper Karnali project.
The cabinet decision on Monday had stressed for development of energy projects to reduce over-dependence on energy imported from India. But the government has not clarified whether it will develop the project on its own or award the project through a competitive bidding.