Investment Board Nepal said that Huaxin Cement Narayani's investment was not under threat even though a sub-committee of the parliamentary Public Accounts Committee has ordered that the land lease agreement it signed with local authorities be cancelled because the planned factory compound encroaches on public land.

The Nepali-Chinese joint venture signed a 50-year lease for 200 ropanis with local authorities of Benighat in Dhading district to expand its factory. The land lies on the banks of the Malekhu River, and the sub-committee has recommended action against the officials of Benighat Rorang Rural Municipality who allowed the company to encroach on riverside land.

“The company can still build the cement factory on the private land it acquired earlier,” said Maha Prasad Adhikari, chief executive officer of Investment Board Nepal, the government agency facilitating the joint venture. “Issues on illegal acquisition of public land have surfaced, and it is up to the respective local and federal authorities to sort them out, but the Chinese investment is not under threat,” said Adhikari.

Huaxin-Narayani is currently constructing a Rs15 billion cement plant on 400 ropanis of private land at Talti, Dhading. The former farmlands had been turned into gravel fields by the 1993 floods. The company embarked on an expansion plan by acquiring another 200 ropanis on the banks of the Malekhu River.

As per the sub-committee report, the cement company also flouted the terms and conditions of the project investment agreement it signed with Investment Board Nepal, and disregarded the rules prescribed by the Department of Industry during its registration.

Huaxin Cement Narayani signed a multimillion-dollar project investment agreement with the board in the presence of Prime Minister KP Sharma Oli in the Chinese capital Beijing in June 2018.

Local representatives of the joint venture say they are unaware of the sub-committee's assessment, and are rebuilding the structures damaged by the recent floods.

According to Tulsi Thapa, local manager of the cement plant, the joint venture is unaware of any report, and is reconstructing structures to build the plant with the help of seven Chinese technical experts who flew in from China for the reconstruction.

The Public Accounts Committee formed a sub-committee in October 2018 to investigate after a local river and environment conservation struggle group filed a complaint against the company accusing it of encroaching on public land.

The company has purchased 400 ropanis for the construction and operation of its plant at Panikharka in Dhading. It has also acquired a limestone mine from the Department of Mines and Geology through a global tender by paying Rs600 million.

The Nepali-Chinese joint venture obtained foreign direct investment approval for $140 million from Investment Board Nepal in December 2015 and began constructing the plant in March 2019.

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