Govt scraps Budigandaki agreement signed with Chinese company

KATHMANDU, Nov 13: The government has scrapped its decision to award the Budigandaki Hydropower project to the China Gezhouba Group Co Ltd (CGGC).

A cabinet meeting held on Monday took the decision to roll back the controversial agreement signed with the Chinese company, according to Deputy Prime Minister and Minister for Energy Kamal Thapa.

Pushpa Kamal Dahal led-caretaker government on May 23, had in principle, decided to entrust the 1200-megawatt Budigandaki project to the Gezhauba Group. Following the cabinet’s decision, the then Energy Minister Janardan Sharma had signed a Memorandum of Understanding in that regard on June 4. But the government’s decision had received wide criticism from academia and parliamentary committees.

Thapa said that the agreement signed with the Chinese builder was of irregularity and imprudent. The Gezhouba Group has also been criticized for its credibility due  to the firm’s poor performance record.

Earlier, a joint meeting of Agriculture and Water Resources Committee and Finance Committee of Parliament had directed the government to scrap the decision on September 26 citing that the mega project was awarded to the Chinese group without going for competition and by violating the Public Procurement Act.