Nepal scraps hydro project with Chinese company; Indian company to get it?

[Dash]

NEW DELHI/BEIJING: In a decision which could have far reaching consequences in the region and for China, Nepal cancelled the Budhi Gandaki hydropower projectwhich had been contracted to a Chinese company. Unconfirmed reports said the project might go to India's NHPC instead.

Nepal's deputy PM Kamal Thapa tweeted the decision on Tuesday, "The agreement, marred by irregularities with the Chinese company, Gezhouba Group, regarding the construction of Budhi Gandaki hydropower project, has been scrapped in a cabinet meeting as directed by the parliamentary committee."

Asked about the development, Chinese foreign ministry spokesperson Geng Shuang said, "I am not aware of this information. China and Nepal have sound relations and bilateral cooperation covers a wide range of areas."

The decision is significant, since the agreement with the Chinese company came weeks after Nepal agreed to join Chinese President Xi Jinping's B
Belt and Road Initiative.

China's Gezhouba Water and Power Co Ltdhad won the contract from the then Maoist-led government headed by former PM Pushpa Kamal Dahalaka Prachanda over a year ago. It was meant to be a water storage dam along the Budhi Gandaki river in the central and western regions of Nepal.

Nepal's decision comes a few years after Myanmar decided to cancel the $3.6 billion Myitsone dam in 2011 by former president Thein Sein. In fact, China said as recently as last week that it would " continue" talking to Myanmar on the issue.

Both have proved to be big setbacks to China's project of creating a web of regional connectivity networks. It is likely the Nepalese decision was influenced by India, which has pointed to Sri Lanka and the debt trap it finds itself in after the Hambantota port project.

While China has been an attractive alternative for Nepal after many years of squabbling with India, where hydro-projects have been a casualty, now Beijing has another player. The US, working closely with India, has earmarked one of its generous grants to Nepal for regional connectivity as part of the larger Indo-Pacific outreach.

Testifying in the US Congress recently, Alice Wells, acting assistant secretary of state, said, "Nepal has been selected for one of the US' most high profile projects to increase regional connectivity within the Indo-Pacific."

In August, she said the Millennium Challenge Corporation's (MCC) board of directors approved a $500 million compact with Nepal, MCC's first compact in South Asia. Both projects have been decided in consultation with India.

The larger trend here is a pushback to Beijing's unilateral connectivity initiative, by India, the US and Japan to work out sustainable transparent alternatives to address local and regional infrastructure needs.


India has expressed concerns about the predatory financing mechanisms employed by China under the OBOR in small, poor countries like Nepal and Sri Lanka which puts them in a debt trap to the Chinese and might impact their foreign policy choices.

https://m.timesofindia.com/india/ne...-indian-co-to-get-it/articleshow/61650423.cms

 

[lonelyman]

Obviously Indians are sabotaging China interests in every way.

Time to offer thermo nuclear weapons to our Pakistan brothers.

 

[Sankpal]

Obviously Indians are sabotaging China interests in every way.

Time to offer thermo nuclear weapons to our Pakistan brothers.

Sure...

 

[kaykay]

So It was scrapped due to irregularities by Chinese company as found by Nepal.
Nepal's deputy PM Kamal Thapa tweeted the decision on Tuesday, "The agreement, marred by irregularities with the Chinese company, Gezhouba Group, regarding the construction of Budhi Gandaki hydropower project, has been scrapped in a cabinet meeting as directed by the parliamentary committee."

 

[Ryuzaki]

Obviously Indians are sabotaging China interests in every way.

Time to offer thermo nuclear weapons to our Pakistan brothers.

CCP already offered blueprints of CHIC-4 and help to set up plutonium reactors back in the 70s

 

[Tom M]

Obviously Indians are sabotaging China interests in every way.

Time to offer thermo nuclear weapons to our Pakistan brothers.

When China can't address Indian concerns, why do you expect India to not compete with China wherever possible ???? Be good to others and then expect good from them. It doesn't work the other way.

Be happy to proliferate Nukes Mr. We would be more than happy if China does that.

 

[$@rJen]

Obviously Indians are sabotaging China interests in every way.

Time to offer thermo nuclear weapons to our Pakistan brothers.

Kid you Just Insulted the Pakistanis that they don't have the Capability to make thermo Nukes

anyway.. could be Indian Influence but how??? Napal is now run by a Cummunist loved Maoist party... how can India have a control??? didn;t you CHinese Claim it..

May be due to Interest Rates !! bringing your own materials, bring your own Engineer but only hires and Napalese for the Dirty works.... or they've sensed your strategy.. Look what you did to the Lankans

 

[Tom M]

Kid you Just Insulted the Pakistanis that they don't have the Capability to make thermo Nukes

anyway.. could be Indian Influence but how??? Napal is now run by a Cummunist loved Maoist party... how can India have a control??? didn;t you CHinese Claim it..

May be due to Interest Rates !! bringing your own materials, bring your own Engineer but only hires and Napalese for the Dirty works.... or they've sensed your strategy.. Look what you did to the Lankans

No whatever China do, they can't have any big leverage over Nepal and Butan, why ?? Because all their trade and external imports happens through India. The nearest seaport is Kolkata for them. If they plan to ditch India, they will have to depend on the Chinese port or Pakistani ports for sea trade, which are miles and miles apart. It's the same card that Pakistan used to Play against Afghanistan. And I don't think they are petty fools unlike some of our neighbors to put all their eggs in one Chinese basket, they will surely try and maintain equilibrium between India and China as far as business is concerned.

 

[Skull and Bones]

Obviously Indians are sabotaging China interests in every way.

Time to offer thermo nuclear weapons to our Pakistan brothers.

And that will stop us from sabotaging Chinese interest in every way?

 

[RISING SUN]

India's NHPC could bid for Nepal's $2.5 billion power project pulled from China
Indian power company NHPC Ltd could bid for a $2.5 billion hydropower project in Nepal, its chairman told Reuters, after Kathmandu cancelled a deal with China Gezhouba Group Corp.

China and India jostle for influence over infrastructure projects in Nepal and the deal with China was scrapped after it was criticised for being handed to the company without any competitive bidding.

State-run NHPC could look at developing what will be the country's biggest hydropower plant, its Chairman Balraj Joshi told Reuters.

"It is too early to talk about funding as firstly the techno-economical parameters of the project would have to be studied," Joshi said on Friday.

With elections in Nepal scheduled to begin later this month, the project is not likely to be discussed by the governments anytime soon, a senior power ministry official said.

Among other projects in Nepal, a 750 megawatts (MW) project is to be built on the western part of the country by China's state-owned Three Gorges International Corp, while two Indian companies - GMR Group and Satluj Jal Vidyut Nigam Limited - are set to build one 900 MW hydropower plant each, mainly to be exported to India.
https://m.economictimes.com/industr...nckw.0&utm_referrer=https://www.google.co.in/

 

[RISING SUN]

How Nepal’s cancelled dam scheme highlights country’s big debate: ally with India or China?
The question of whether Nepal should go ahead with plans to build a dam with a Chinese firm has become entwined in the wider debate about whether the country should align itself with India or China.

The Nepalese government indicated last week it would abandon the US$2.5 billion deal with Chinese state company China Gezhouba Group.

The deal was signed in June during the administration of Pushpa Kamal Dahal, chairman of the Maoist Centre party, but his government has since been replaced by an interim administration ahead of elections later this month.

Khadga Prasad Sharma Oli – the chairman of the electoral bloc formed by Maoist Centre and the other main Communist group, the Unified Marxist-Leninists – warned against revoking the plan.

“The issue here is about foreign investment and such decisions cannot be taken on a whim,” he said, as the polls for the November 26 provincial and federal elections showed his bloc to be taking the lead.

The decision to scrap the project highlights Nepal’s divisions over how close the country should be to China, which has emerged as an alternative to its traditional ally India.

Yet the country’s political instability, which has already seen four prime ministers come and go since it adopted a new constitution in September 2015, makes it even more difficult to strike the correct balance between the neighbouring Asian giants.

Nepal’s political institutions emerged as part of the peace process to bring Maoist insurgents into the political mainstream following a long-running insurgency.

The dam agreement, signed a few weeks after Nepal joined China’s “Belt and Road Initiative”, was described by Deputy Prime Minister Kamal Thapa as being made “in an irregular and thoughtless manner” when he first revealed the cabinet decision via Twitter on Monday.

The formal decision to scrap the plan was announced by the Ministry of Energy on Friday.

The plan has been criticised because a memorandum of understanding with the Chinese company was signed without an open bidding process as required by law.

Rupak Sapkota, a researcher at Nepal Institute for Strategic Analyses, said the scrapping of the plan was the result of conflict between Nepalese political factions over their respective alignment with India and China.

“Nepal is still trying to figure out a balanced position between India and China,” he said.

He said the present Congress Party-led government – a transitional one formed ahead of the election – was known to be more pro-India and was trying to show loyalty to Delhi before, assuming the polls were correct, it was replaced by the more pro-China Maoist bloc.

Yet, Madhav Das Nalapat, a geopolitics expert from India’s Manipal University, said the cancelling of the plan “is not reflective of domestic politics but of domestic economic imperatives”.

He said China’s negotiation tactics when dealing with countries such as Sri Lanka, Myanmar, Nepal and Pakistan mirrored the hard-headed approach of US or European Union companies rather than offering “friendly” terms and conditions.

Water-rich Nepal has traditionally relied on India for technology and funding to meet its annual requirements of 1,400 megawatts.

Should the project go ahead, the Budhi Gandaki dam – to be built about 50km west of Kathmandu – could generate 1,200MW.

Sapkota said Nepal needed more hydroelectric power to help improve the lives of people as well as boost the economy. “We have been waiting for a long time,” he said.

Domestic political divides over whether to engage with China’s belt and road plans to build an infrastructure network across Eurasia and into Africa are hardly exclusive to Nepal.

This week Pakistan also decided to cancel the US$14 billion Diamer-Bhasha dam with China because it could not accept the strict conditions.

In 2015 the Sri Lankan government suspended work on a US$1.4 billion Colombo port deal made by a previous administration, as it faced criticism domestically for being too reliant on Chinese investment.

However last year it decided to resume the project due to its falling foreign reserves.

“Whenever India indicates discreetly that a ‘red line’ has been crossed in a South Asian country’s wooing of China, that country usually draws back rather than trigger a negative reaction from the largest South Asian power. The present government in Kathmandu is following such a line,” Nalapat said.

Zhao Gancheng, head of South Asian studies at the Shanghai Institutes for International Studies, said this had always been a challenge for China as it continued to increase its investments in developing countries.

“China needs to protect itself more to guarantee that it is signing the deal with the whole country, not the person governing it at that moment,” Zhao said.

“If Nepal shows that its priority is to cater to India whenever pressure is applied, China should be more aware of its own interests and take careful consideration before funding projects in the country in the future.”
http://www.scmp.com/news/china/dipl...-cancelled-dam-scheme-highlights-countrys-big

 

[lonelyman]

How Nepal’s cancelled dam scheme highlights country’s big debate: ally with India or China?
The question of whether Nepal should go ahead with plans to build a dam with a Chinese firm has become entwined in the wider debate about whether the country should align itself with India or China.

The Nepalese government indicated last week it would abandon the US$2.5 billion deal with Chinese state company China Gezhouba Group.

The deal was signed in June during the administration of Pushpa Kamal Dahal, chairman of the Maoist Centre party, but his government has since been replaced by an interim administration ahead of elections later this month.

Khadga Prasad Sharma Oli – the chairman of the electoral bloc formed by Maoist Centre and the other main Communist group, the Unified Marxist-Leninists – warned against revoking the plan.

“The issue here is about foreign investment and such decisions cannot be taken on a whim,” he said, as the polls for the November 26 provincial and federal elections showed his bloc to be taking the lead.

The decision to scrap the project highlights Nepal’s divisions over how close the country should be to China, which has emerged as an alternative to its traditional ally India.

Yet the country’s political instability, which has already seen four prime ministers come and go since it adopted a new constitution in September 2015, makes it even more difficult to strike the correct balance between the neighbouring Asian giants.

Nepal’s political institutions emerged as part of the peace process to bring Maoist insurgents into the political mainstream following a long-running insurgency.

The dam agreement, signed a few weeks after Nepal joined China’s “Belt and Road Initiative”, was described by Deputy Prime Minister Kamal Thapa as being made “in an irregular and thoughtless manner” when he first revealed the cabinet decision via Twitter on Monday.

The formal decision to scrap the plan was announced by the Ministry of Energy on Friday.

The plan has been criticised because a memorandum of understanding with the Chinese company was signed without an open bidding process as required by law.

Rupak Sapkota, a researcher at Nepal Institute for Strategic Analyses, said the scrapping of the plan was the result of conflict between Nepalese political factions over their respective alignment with India and China.

“Nepal is still trying to figure out a balanced position between India and China,” he said.

He said the present Congress Party-led government – a transitional one formed ahead of the election – was known to be more pro-India and was trying to show loyalty to Delhi before, assuming the polls were correct, it was replaced by the more pro-China Maoist bloc.

Yet, Madhav Das Nalapat, a geopolitics expert from India’s Manipal University, said the cancelling of the plan “is not reflective of domestic politics but of domestic economic imperatives”.

He said China’s negotiation tactics when dealing with countries such as Sri Lanka, Myanmar, Nepal and Pakistan mirrored the hard-headed approach of US or European Union companies rather than offering “friendly” terms and conditions.

Water-rich Nepal has traditionally relied on India for technology and funding to meet its annual requirements of 1,400 megawatts.

Should the project go ahead, the Budhi Gandaki dam – to be built about 50km west of Kathmandu – could generate 1,200MW.

Sapkota said Nepal needed more hydroelectric power to help improve the lives of people as well as boost the economy. “We have been waiting for a long time,” he said.

Domestic political divides over whether to engage with China’s belt and road plans to build an infrastructure network across Eurasia and into Africa are hardly exclusive to Nepal.

This week Pakistan also decided to cancel the US$14 billion Diamer-Bhasha dam with China because it could not accept the strict conditions.

In 2015 the Sri Lankan government suspended work on a US$1.4 billion Colombo port deal made by a previous administration, as it faced criticism domestically for being too reliant on Chinese investment.

However last year it decided to resume the project due to its falling foreign reserves.

“Whenever India indicates discreetly that a ‘red line’ has been crossed in a South Asian country’s wooing of China, that country usually draws back rather than trigger a negative reaction from the largest South Asian power. The present government in Kathmandu is following such a line,” Nalapat said.

Zhao Gancheng, head of South Asian studies at the Shanghai Institutes for International Studies, said this had always been a challenge for China as it continued to increase its investments in developing countries.

“China needs to protect itself more to guarantee that it is signing the deal with the whole country, not the person governing it at that moment,” Zhao said.

“If Nepal shows that its priority is to cater to India whenever pressure is applied, China should be more aware of its own interests and take careful consideration before funding projects in the country in the future.”
http://www.scmp.com/news/china/dipl...-cancelled-dam-scheme-highlights-countrys-big

On a serious note, it will triple the budget and takes at least 100 years for Indians to build a dam like this.