Former prime minister and coordinator of Naya Shakti Party Nepal Baburam Bhattarai on Thursday criticised the government’s recent decision to award the construction contract for themassive Budhi Gandaki Hydroelectric Project to a Chinese company without a competitive bidding process.

The memorandum of understanding signed with China Gezhouba Group Corporation (CGGC) should be scrapped immediately, Bhattarai said.  

The 1,200 MW storage-type project located in north central Nepal will be constructed under an engineering, procurement, construction and financing (EPCF) model.

“When we are transforming into an industrial economy from an agriculture-based economy, the government should build large infrastructural projects itself,” said Bhattarai. “But the Pushpa Kamal Dahal-led government has decided to award the project to a Chinese developer without competitive bidding.” Such practices will set a wrong precedent in the long run, he added.    

On Sunday, the Ministry of Energy signed the deal with CGGC for the development of the much-touted hydro project which will be the largest in the country after it is completed.

The agreement was signed by the then energy minister Janardan Sharma and CGGC President Lv Zexiang at the prime minister’s residence in the presence of the then prime minister Dahal and Chinese Ambassador to Nepal Yu Hong. The signing has formalized the Cabinet’s recent decision to award the project to the Chinese company without conducting international bidding.

Under the EPCF model, CGGC will help to arrange financing to develop the project. The funds will be mobilised in the form of soft or commercial loans from Chinese financial institutions under terms and conditions acceptable to the Nepal government. CGGC will also undertake the overall responsibility of executing the project.