Budhi Gandaki Hydroelectric Project

China Gezhouba objects to termination of MoU, terms it invalid

Published On: November 29, 2017 02:16 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Nov 29: China Gezhouba Group of Company (CGGC) Limited has objected to the government's decision to scrap the Memorandum of Understanding (MoU) signed with it for development of Budhi Gandaki Hydroelectric Project 

It has termed the decision 'unilateral' and 'invalid'. 

In its letter sent to the Ministry of Energy dated November 17, the Chinese company has said that it would refuse the unilateral declaration to terminate the MoU. 

The government had scrapped the MoU on November 13, citing the decisions of the erstwhile Finance and Agriculture and Water Resources committees.

The company, which was entrusted the 1200-megawatt reservoir plant as per the MoU signed in June by the former government led by UCPN Maoist (Center), has expressed reservation over the decision, saying that it was also not given prior information of the termination as per the Clause 9 of the MoU. 

Clause 9 of the MoU states that other party should be notified about termination by giving a 30-day notice along with reasons to do so.

An excerpt of the letter addressed to senior divisional engineer of MoE, Raju Maharjan, reads: “The abrupt action on behalf of the Government of Nepal to terminate MoU specifies no ground nor we bound by any reasons to the decision of the termination, which in itself didn't entertain the basic rule of game as stipulated under Clause 9 of the MoU.” 

“This mode of termination reflects unfair conduct on the part of Government of Nepal… The failure to follow the required procedure in itself renders invalid termination. The termination must be attributed to a valid reason, it merely required 'unequivocal' conduct, which we did not observe on the part of the Government of Nepal,” the letter states.

The company also has cited a clause, which, it says, has barred both parties working with any other third party in pursuit of a contract agreement for the project.

Address our demands at the earliest: Project-affected locals 

 Locals affected by Budhi Gandaki Hydroelectric Project has threatened to launch protest if their demands like distribution of compensation, determination of compensation amount for land and houses in market areas, rehabilitation plan and shares of locals in the project are not addressed within the current fiscal year.

Issuing a statement on Tuesday, the Budhi Gandaki Hydroelectric Project Concern Committee said it was unfortunate that the Ministry of Home Affairs has not responded to their demand for review of compensation amount fixed by the compensation fixation committee. 

Out of the 58,153 ropani of land to be acquired by the project, the project has provided compensation for only 3,700 ropani in Gorkha and 4,900 ropani in Dhading so far. Though transaction of land in the project affected area was blocked two years ago, the government is still to distribute compensation for more than 49,000 ropani, the committee said in the statement. It also regretted that the government, as well as the political parties, has shown indifference toward their demand.

Although the compensation fixation committee has proposed to the cabinet to evaluate the private properties set to be demolished to provide compensation along with rehabilitation facilities for those displaced, the proposal is yet to be passed by the cabinet, the committee said in the statement.

Read the Letter submitted by the company here. 

Leave A Comment