Nepal Scraps Chinese Contract, Will Build Mega Power Project On Its Own

[RPK]

Nepal's finance minister made the announcement to scrap the hydel power project with the Chinese firm while releasing the first federal budget for fiscal 2019

NEW DELHI: Nepal has decided to build a 750 megawatt hydel project on its own after scrapping an agreement with a Chinese infrastructure firm, the Himalayan nation's finance minister Yubaraj Khatiwada has said.

The reservoir type project in western Nepal couldn't be completed as the company, China Three Gorges Corporation or CTGC, demanded a hike in the power purchase rate, the price at which Nepal would be buying electricity.

The Nepal finance minister made the announcement to scrap the agreement while releasing the first federal budget for fiscal 2019.

Nepal's rivers, cascading from the snow-capped Himalayas, have vast, untapped potential for hydropower generation, but lack of funds and technology have made Nepal lean on India to meet annual demand of 1,400 megawatts (MW).


The power project has been stuck since 2012. The Nepal government said it made the decision to terminate the deal with the Chinese after a committee looked into the deal and gave its suggestion.

A year ago, the Chinese firm had given Nepal an option to reduce the production capacity to 600 MW, in case Nepal was not agreeable to paying a higher power purchase cost.


The agreement signed between the two nations state that the Chinese firm CTGC will have a 75 per cent stake in the project and the rest will be held by the Nepal Electricity Authority.

The project with the reservoir covers Baitadi, Bajhang and Dadeldhura. It was expected to produce 1.8 billion units of electricity a year.

The project with the 207-metre-tall dam was estimated to cost $1.8 billion, including the interest charges, or $1.4 Billion excluding interest charges.

In November last year, Nepal had also scrapped a $2.5 billion deal with China Gezhouba Group Corporation to build the country's biggest hydropower plant, citing lapses in the award process, the energy minister had said.


In June last year, a Maoist-dominated coalition government had awarded a contract to China Gezhouba Group Corporation to build a 1,200 MW plant on the Budhi Gandaki River, 50 kilometres west of Kathmandu, to address acute power shortages.

Critics had said the $2.5 billion project was handed to the Chinese company without any competitive bidding, which is required by law, and a parliamentary panel asked the government that succeeded the Maoist-led coalition to scrap the deal.

https://www.ndtv.com/world-news/nep...l-build-mega-power-project-on-its-own-1859540

 

[AUSTERLITZ]

All chinese cheerleaders celebrating china's growing dominance in nepal missing in action as usual.

 

[waz]

All chinese cheerleaders celebrating china's growing dominance in nepal missing in action as usual.

It could have been a simple cost thing dude, what makes you think its strategic?

 

[Chhatrapati]

It could have been a simple cost thing dude, what makes you think its strategic?

You can’t expect India to buy power from a Chinese-built project. Let Nepal take Chinese assistance to build those dams and let China buy back the power produced from there.
A senior government official told The Indian Express
https://www.thequint.com/news/india/india-nepal-china-hydropower-projects

 

[oOo]

It could have been a simple cost thing dude, what makes you think its strategic?

Because its not strategically positive thing to scrap awarded contract to a country you look for building a deep strategic relations with.

 

[waz]

Because its not strategically positive thing to scrap awarded contract to a country you look for building a deep strategic relations with.

That depends on how the other country views it. But they did speak about a "bidding" process or lack of, so hence you can't just jump to the whole take that China conclusion.

 

[oOo]

That depends on how the other country views it. But they did speak about a "bidding" process or lack of, so hence you can't just jump to the whole take that China conclusion.

You must very well know how loopholes are used to award a contract and then again to scrap it. Its about will and wish of presiding governments and their goals.

 

[xyx007]

it is not a big deal, Just simply miss some formal formalities in June last year, a Maoist-dominated coalition government had awarded a contract to China Gezhouba Group Corporation to build a 1,200 MW plant on the Budhi Gandaki River, 50 kilometers west of Kathmandu, to address acute power shortages.
Critics had said the $2.5 billion project was handed to the Chinese company without any competitive bidding, which is required by law, and a parliamentary panel asked the government that succeeded the Maoist-led coalition to scrap the deal.

 

[RPK]

^^^ LOL that was different project.

 

[Kuru]

That escalated quickly.

 

[Nilgiri]

It could have been a simple cost thing dude, what makes you think its strategic?

Yeah it was a cost thing basically. India refused to buy any power produced by a Chinese constructed dam....made the whole thing nonviable basically.

Now Nepal building on "its own" is legalese for India gonna build it...like the litany of other dams following the same story previously. There won't be much bidding, it will be whomever greases Nepali bureaucrat hands the most....or use existing links there.

PM Oli bit off more than he could chew on this, he will try balance the optics in some other things, but not the hard economic matters (not after this anyway)....he can't wish away the geography, economic and cultural links to India....and he's smart enough to know that and just prod here and there and see what gives and what doesn't.

 

[Feng Leng]

If we demanded a hike in the price rate it means we scrapped the deal. Actually, probably there was no deal and the two sides were just talking. Chinese companies are involved in so many infrastructure projects these days in Nepal and elsewhere it is inevitable some deals will fall through just like the US is no stranger to crashes of its helicopters from training.

 

[Ryuzaki]

$4.3 billion of Hydropower projects by China cancelled by Nepal,looks like the Maoist Pm of Nepal wanted to play Chinese card against India but has fallen flat on his face

 

[Beast]

Because its not strategically positive thing to scrap awarded contract to a country you look for building a deep strategic relations with.

Nepal never just want to rely on one country for deep strategic. It holds to maintain save level of partnership with all countries.

But that is not what Indian think when comes to Nepal. Indian think Nepal can only have deep r/s and strategic link with them. All others not allow. Indian officers now need to act humble when comes to Nepal/india r/s. No more banging tables or shouting at Nepalese.