The parliamentary Public Accounts Committee on Sunday directed the government to cancel a controversial 50-year lease for 169 ropanis of land in Dhading, signed by the local government with the Nepali-Chinese joint venture cement company.

The land leased by the local government to Huaxin Cement Narayani to expand its factory lies on the banks of the Malekhu River. The Nepali-Chinese joint venture had obtained foreign direct investment approval for $140 million from Investment Board Nepal in December 2015. It began constructing the plant in March 2019.

Based on a sub-committee report led by lawmaker Lekh Raj Bhatta, the House committee on Sunday passed a decision to revoke the deal stating that the local government has no right to lease out the public property violating all norms, said Roj Nath Pandey, spokesperson for the Parliament Secretariat.

The committee directed the government to take possession of the land with immediate effect.

“The committee found evidence that Benighat Rorang Rural Municipality has leased out 169 ropanis of public land to Huaxin Narayani for 50 years. The decision is illegal, against constitutional provisions, as even the government cannot allow lease for more than 30 years,” he told the Post.

Lawmakers on Sunday’s meeting termed the lease agreement a gift to a private party.

As the cement manufacturer is in the process to build an access road from Malekhu Bazaar to the plant site, the committee has directed the government to allow building the road only after preparing the detailed project report and environmental impact assessment report.

Pandey said that the company cannot build high tension lines which run through public settlements.

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 169 ropanis on the banks of the Malekhu River.

It has also acquired a limestone mine from the Department of Mines and Geology through a global tender by paying Rs600 million.

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.

A company representative in Kathmandu told the Post that they are not in a position to comment on the issue right now.

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.

In a recent interview with the Post, Maha Prasad Adhikari, chief executive officer of Investment Board Nepal, had said that the company could still build the cement factory on the private land it has acquired.

“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,” Adhikari said.