The new government in Nepal has reportedly overturned the decision of the former administration and asked the China Gezhouba Group Corporation to construct the country’s largest hydropower plant, in an attempt to encourage Chinese investment in Nepal’s infrastructure. The proposed $2.5 billion deal to build the Budhi Gandaki hydroelectric project with the Gezhouba Group was dismissed last year by the former government, alleging failure in the award process.
Supposedly a China-friendly Prime Minister, K.P. Sharma Oli had promised to reinstate the project to the Chinese construction company, if elected in last year’s elections. In February, Oli became prime minister after his Nepal Communist Party gained a landslide poll victory, records confirm.
Sources claim that after the government negotiates all aspects of the project with the China’s Gezhouba Group, a formal construction agreement will be signed on the hydropower project. No dates related to the deal had been disclosed so far, the sources mentioned.
Roshan Khadka, aide to Energy Minister Barsa Man Pun confirmed that the Budhi Gandaki project is being restored to the Chinese company. He did not give out any further information on the decision taken by the cabinet.
Reports state that the pouring rivers from the snow-capped Himalayas have huge potential for production of hydropower, but Nepal lacks the funding to build an infrastructure and depends heavily on India for its 1400 megawatts annual demand. Subsequently, the upcoming 1200 megawatt plant on the Budhi Gandaki river, which is about 32 miles west of Kathmandu, is intended to address severe power shortages which has ruined the economic growth in the country.
Experts debate that, instead of assigning the project to the Chinese company, it should have been open for international bidding. Apparently, by providing support and investment and in infrastructure projects, both, India and China are pushing for influence in Nepal. Nepal, purportedly, wants the upcoming hydropower project to be a part of Chinese President Xi Jinping’s Belt and Road initiative (BRI) aimed at connecting China to the rest of Asia and beyond.