Baburam Bhattarai-led Naya Shakti Nepal has demanded the government scrap its decision to award the contract to construct the Budhi Gandaki Hydroelectric Project to a Chinese company.

Party coordinator Bhattarai on Wednesday submitted a memorandum to Prime Minister Sher Bahadur Deuba and urged him to start the construction of the project without further delay by inviting international bids.

A Cabinet meeting on May 23 had decided to award the contract to China Gezhouba Group Corporation (CGGC) to build the 1,200 MW project under the engineering, procurement, construction and finance (EPCF) model of project development.

The party has claimed that contracting the project to the Chinese company was against national interests and also technically faulty. It has said such decision would have a long-term effect on the country's economic and social sector.

The party is of the view that the project should be build by Nepal with investment from the government, national banks, Employees Provident Fund, Citizens Investment Fund, Nepal Army Welfare Fund, share of common people and, if need be, by taking loan on low interest rates from Exim banks of other countries.