As the dispute between the Energy Ministry and Asian Development Bank, a key financer to the project, puts the storage project at stake, the prime minister directed the officials to move ahead in a way that does not cost Nepal its credibility in the eyes of donors, officials and PM’s aides told the Post.

After Energy Minister Radha Gyawali decided to scrap the consultant appointment process, rejecting the selection of the consultant by the ADB, the fate of the project hangs in balance.

Koirala invited senior leaders of the ruling Nepali Congress and the CPN-UML, ministers and government officials to a meeting at his residence in Baluwatar and asked them to ensure that the project moves ahead without further delay.

“The prime minister said that nothing should hinder project development and if there has been any error it should be corrected,” said former UML chairman Jhala Nath Khanal. “As Energy Minister Gyawali was absent in the meeting, final decision will be made after the PM holds talks with her.”

Deputy Prime Minister Bam Dev Gautam from the UML and Nepali Congress Vice-president Ram Chandra Poudel were also present at the meeting.

Officials privy to the meeting said the prime minister insisted that the agreement with donors should be the guiding factor in deciding the matter.

A senior Energy Ministry official said they had not received a written directive from the PM on the matter.

The ADB had selected a joint venture between Germany’s Lahmeyer International and Canada’s Manitoba Hydro but the ministry wanted to award the contract to another bidder—Japan’s Kansai Electric Power Company.

While the Energy Ministry questioned the ADB selection citing the consultant’s little experience in sedimentation flushing, the bank said the pick was based on holistic merits—tendering process, construction supervision and operational maintenance.

A senior ADB official claimed that they had not made a mistake in the selection process and that the joint review committee represented by the Energy Ministry also found no fault in the evaluation process. The ADB had found no reason to backtrack.

Finance Ministry officials said donors could pull out of the project if the ADB’s

selection was not approved. Financing partners ADB, European Investment Bank (EIB) and Japan International Cooperation Agency have given such hints, three senior Finance Ministry officials said.

“We do not want to think about project implementation to be further delayed, or deviate from what the joint review committee concluded as tripartite consensus,” a senior ADB official told the Post.

The EIB recently wrote a letter supporting the ADB position to the ministry, according to officials. Japanese Ambassador to Nepal Masashi Ogawa has also been actively involved in talks with government officials and politicians regarding the project.

Meanwhile, the Finance Ministry is preparing to send a letter to the Energy Ministry rejecting the cancellation of the consultant appointment process.