Nepal restores cancelled mega hydropower contract with China firm

In accordance with the decision taken at a Cabinet meeting chaired by Prime Minister K P Oli on Friday night, the energy ministry will formalise the deal with the Chinese company, Energy Minister Barshaman Pun told journalists on Sunday.

Kathmandu | Updated: September 24, 2018 12:08:01 am

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The cost for the project was originally estimated to be around .5 billion. However, it will now go up to billion. (Image used for representational purpose)

THE Nepal government will soon award the contract for the 1200MW Budhi Gandaki hydropower project to Gezhouba, a Chinese company.

In accordance with the decision taken at a Cabinet meeting chaired by Prime Minister K P Oli on Friday night, the energy ministry will formalise the deal with the Chinese company, Energy Minister Barshaman Pun told journalists on Sunday.

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In 2017, the government headed by then PM Pushpa Kamal Dahal had originally signed a contract for the hydropower project with the same Chinese firm. However, the next government, headed by Sher Bahadur Deuba, had cancelled the contract.

The Deuba government annulled the contract with Gezhouba, saying that the deal was not transparent. It had also announced that the Nepal Electricity Authority (NEA), a state-run body, would undertake the project.

The energy minister said Sunday that the awarding of the project to the NEA stood cancelled with the latest Cabinet decision.

The cost for the project was originally estimated to be around $2.5 billion. However, it will now go up to $3 billion.

Oli, who has built a good rapport with China and signed a trade and transit treaty with the country, had announced soon after he secured majority seats in Parliament in December that once he assumed power, the project would be handed back over to the same Chinese firm.