Nepal to cancel a deal on building a hydroelectric power plant by Chinese state-owned company

Almaty. November 14. Silkroadnews - Nepal is expected to cancel a deal on building a hydroelectric power plant by Chinese state-owned company, South China Morning Post reported.
According to deputy prime minister of Nepal Kamal Thapa, the plan to award the US$2.5 billion hydroelectric project to China Gezhouba Group had been scrapped.
“In the meeting of the Board of Ministers held today, the agreement with the Gezhouba Group in respect of Budhi Gandaki Hydro Electric Project was found in an irregular and thoughtless manner and rejected under the direction of Parliamentary Committee,” he said.
Both sides signed a memorandum of understanding in June on construction of a 1,200-megawatt hydroelectric power plant 80 km from Kathmandu, concluding the deal less than a month after Nepal formally agreed to participate in the Beijing’s “Belt and Road” initiative.
Dinesh Kumar Ghimire, spokesperson for the Ministry of Energy of Nepal, said that, in his opinion, the decision was final.
The Nepali public relations officer of Gezhouba group reported the company was not notified of this decision, adding that the memorandum was to become a formal contract next year.
Gezhouba already has at least two hydropower contracts in Nepal, in addition, Chinese companies are also building hospitals, roads and airports in this country.
Reportedly, the government of Nepal, led by the former Prime Minister Pushpa Kamal Dahal, joined the “Belt and Road” initiative in May.
Some doubted whether relations between Nepal and China would remain the same after Sher Bakhadur Deuba became prime minister in June.
In August, Deuba assured Vice Premier Wang Yang that his government remains committed to implementing past agreements, including the “Belt and Road” initiative.
Sun Shihai, a specialist on China’s relations with South Asia at the Chinese Academy of Social Sciences, said there are various factors that could affect the decision to abandon the project.
“It could involve environmental groups, domestic politics or other interest groups. The Nepalese government still needs China badly for its infrastructure construction,” Sun said.