AWRC starts discussion on decision to award Budhigandaki to Chinese firm

Published On: July 3, 2017 12:00 AM NPT By: Republica


KATHMANDU, July 3: The Agriculture and Water Resources Committee (AWRC) of parliament has started discussion on the government's controversial decision to award Budhigandaki Hydropower Project (1200 MW) to a Chinese company.

After nearly a month since the former government took the decision at the eleventh hour, members of the committee on Sunday questioned why the decision to award the project to China Gezhouba Group Corporation was taken, going against the committee's past direction to build the project by utilizing domestic resources.

Lawmakers also accused the government of handing over the national pride project to the Chinese firm without any competition and breaching the country's public procurement laws.   

The project, located near the capital city, is said to be of strategic importance and a key to addressing country's power crisis. It is estimated to cost Rs 259 billion, including land acquisition cost.

The then Minister of Energy Janardan Sharma had signed the agreement to award the project with representative of CGGC at the Prime Minister's Residence in Baluwatar on June 4 - the last day in office.

Lawmaker Kashi Nath Adhikari said that the government has undermined the parliamentary committee by breaching its direction. “The committee should not remain mute spectator on this issue,” Adhikari said, urging the committee to scrap the agreement immediately. 

Earlier, after holding multiple discussions with Employees Provident Fund (EPF), Citizen's Investment Trust (CIT) and Nepal Telecom (NT) as well as the project's officials and experts, the house panel had concluded that the mega project could be developed by utilizing domestic resources.  

Speaking at the meeting, Energy Secretary Anup Kumar Upadhyaya defended the decision to award the project to China Gezhouba, saying that the government cannot allocate needful budget to the mega project as the energy sector gets only around Rs 50 billion annually. “The World Bank Group and the Asian Development Bank were uninterested to invest in the project. Also, it was impossible to net new line of credit from India and China until the already existing lines of credit are spent,” he added.

But Upadhyaya's statement contradicts with the commitments made by the officials of EPF, CIT and others to the then energy minister Sharma in August. They had told Sharma that they could immediately invest Rs 83 billion from their reserve fund and could allocate Rs 54 billion annually.

Adhikari also questioned the validity of the decision, stating that Sharma signed the agreement without getting it endorsed by the cabinet. 

Lawmaker Amrit Bohora said that the committee was curious to know why Sharma awarded the project after leaving the office of the energy ministry. “The project's fate is also uncertain as the Chinese company has a poor performance record with at least two of its projects making no or slow progress,” Bohora added.

Mohan Prasad Baral, chairperson of the committee, said that the committee started discussion after nearly a month since the decision was taken because of the local-level election. “We will discuss the issue with experts as well as the representatives of EPF, CIT and other banks and financial institutions and take final decision on the issue,” he said. “We are worried that the government's decision has thrown the mega project into uncertainty.”

He also said that the committee will come to a conclusion within few days.


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