Nepal clears China's $1.6 B hydroelectric project amid irregularities

A parliamentary panel cleared the way for a Chinese company to build a $1.6 billion hydroelectric plant in Nepal.

The Natural Resources and Means Committee of the parliament had asked for the project to be halted due to allegations of irregularities in awarding the contract to the Chinese company without any international bidding.

Nepal had signed an agreement with China's Three Gorges International Corp in February allowing the firm to construct the 750-megawatt West Seti dam in the northwest.

The Chinese firm, which was to own a 75 percent stake in it while the state-owned Nepal Electricity Authority would take the rest, threatened to pull out after the parliamentary panel ordered an inquiry.

"We have now directed the government to let the Chinese company go ahead with the project but with some corrections in the agreement," Shanta Chaudhary, chief of the parliamentary panel, said after an investigation
of three weeks.

The project, set to be completed in 2019, is expected to ease the crippling power shortage in Nepal whose economy is still emerging from a decade-long civil war - conflict that scared away investors and slowed
infrastructure projects.

"But the project must be routed through the Nepal Investment Board as required by law," she said without giving details.

According to Lakshman Ghimire, a member of the committee, the Chinese firm should be given only 51 percent stakes instead of 75 percent and the remaining distributed among the public in the remote villages where
the project is to be located.

It is Nepal's biggest foreign investment programme.

Officials from the Chinese firm were not available for comment.