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Nepal questions power project allocation to China

Raising suspicions of impropriety, a committee of Nepal's parliament has directed the government to stop work on a hydro-electric project allotted to a state-owned Chinese company.

world Updated: Mar 11, 2012 02:20 IST
Utpal Parashar

Raising suspicions of impropriety, a committee of Nepal's parliament has directed the government to stop work on a hydro-electric project allotted to a state-owned Chinese company.


The move comes less than 10 days after Nepal signed a MoU with China Three Gorges Corporation to develop the 750MW West Seti Hydro-Electric Project, one of Nepal's biggest electricity projects.

Directing the ministry of energy to halt all work till further notice, the committee on natural resources and means has formed an 11-member sub-committee to probe the agreement.

The sub-committee has been asked to investigate why the Nepal government signed the MoU with CTGC in haste without any competitive bidding and submit its report within 10 days.

"The committee will decide whether the MoU should be implemented or scrapped as per report of the sub-committee. Till then work on West Seti should stop," said committee chairman Shanta Chaudhary.

The WSHEP had been earlier allotted to Snowy Mountain Energy Corporation, an Australian company. But after it failed to start work for 15 years, the deal was scrapped last July.

The project was handed over to CTGC, which manages the Three Gorges Dam, the world's largest power station with installed capacity of 21,000 MW, on February 29.

But doubts about the deal and its benefits for Nepal came to the fore soon after. The parliamentary committee also blamed the government for failing to get free equity and electricity from the project.

A 2008 deal with India's GMR group to develop 900MW Upper Karnali project had provision of 27% free equity and 12% free electricity for Nepal. But the deal with CTGC had no such terms.