Nepal has get rid of a $2.5 billion deal with China Gezhouba Group Corporation to construct the country’s biggest hydropower plant, making reference to failure in the award process, the energy minister said.
“The administration has scrap the unsteady agreement with Gezhouba Group to construct the Budhi Gandaki hydroelectric project,” Energy Minister Kamal Thapa, who is also the country’s deputy prime minister, said on this in a twitter post in Nepali after a cabinet meeting.
He did not give further details.
Nepal’s rivers, pour downward rapidly from the snow-capped Himalayas, have vast, untapped potential for hydro-power generation, but lack of money and technology have made Nepal depend on neighbour India to meet yearly demand of 1,400 megawatts (MW).
A contract was awarded by a Maoist-dominated coalition government to China Gezhouba Group Corporation six month ago to construct a 1,200 MW plant on the Budhi Gandaki river, about 50 km (32 miles) west of Kathmandu, to address acute power shortages.
Attackers say the $2.5 billion project was given to the Chinese company without any ruthless bidding, which is expected by law, and a parliamentary panel asked the government that take the place of the Maoist-led coalition to cancel the deal.
Administrator of the Chinese company were not immediately available for comment.
Both China and India compete for power with aid and investment in infrastructure projects in Nepal.
A 750 MW project have been authorized by Kathmandu to be built on the West Seti River in the western part of the country by China’s state-owned Three Gorges International Corp.
It has also authorized two Indian companies – GMR Group and Satluj Jal Vidyut Nigam Limited to construct one hydro-power plant each, both having the ability of generating 900 MW of power each, mainly to be conveyed to India.