The government has decided not to hand over the Budhigandaki hydropower project to a Chinese company. The cabinet meeting held on Thursday evening has decided to dismiss China Gezhouba Group Company Limited from the Budhigandaki project as per the proposal of the Ministry of Energy, Water Resources and Irrigation and build it with indigenous investment.
According to sources in the Office of the Prime Minister and Council of Ministers, the decision to move the project forward with indigenous investment has been taken as the previous decision of the Council of Ministers could not be implemented.
The government had announced in the budget of the current fiscal year to determine the construction structure of the project and manage it by implementing resources. Energy Minister Pampha Bhusal had given a three-month ‘deadline’ in November to China Gezhouba Group Company Limited, which is discussing the construction of Budhi Gandaki, to take a decision on moving the project forward. As it is a multi-purpose project, Minister Bhusal had asked China Gezhouba Group Company Limited to take a quick decision on the project.
However, as China Gezhouba Group Company Limited was not interested in resolving the issue within the time limit, the ministry had taken the proposal to the cabinet, concluding that the Chinese company would not wait for the project.
In the year 2075, under the then Prime Minister KP Sharma Oli, the Council of Ministers had decided to give the responsibility to the Ministry of Energy to formulate the modalities to be given to Gejuwa in the Engineering, Procurement, Construction and Financing (EPCF) model.
According to this model, the company had to look after the technical and financial aspects of the project. According to the EPCF modality, after the construction of all the investment projects raised by China Gezhouba Group Company Limited, the Government of Nepal would have to pay Sava and interest in installments for a fixed year. The investor of such a loan and the interest rate should have been agreed upon at the outset.
However, the Ministry of Energy could not reach an agreement with China Gezhouba Group Company Limited as per the mandate. During the talks held from January 19 to 20, it was agreed to bring a proper proposal from both sides soon. Though discussions were held on the capacity, cost, loan, and interest rate of the project, no agreement was reached. After that, there was no discussion with China Gezhouba Group Company Limited about this.
Therefore, it has been decided that the government will move ahead with the non-indigenous investment. At present, NEA Engineering Company under Nepal Electricity Authority is updating the cost estimate of the project.
