The main opposition Nepali Congress has expressed serious concern over the government decision to renew negotiations with China Gezhouba Group Company Limited to develop the Budhi Gandaki Hydroelectric Project, arguing that awarding the project without competitive bidding process was against the national interest.

Taking exception to the Cabinet’s decision for holding a fresh round of negotiations with the Chinese firm whose contract was terminated by the Sher Bahadur Deuba-led government last year, the party also called on the government to develop the project with internal resources.

“A study team formed by the then NC-led government had concluded that Budhi Gandaki Project should be developed on domestic investment. The government has started public participation to raise funds where billions of rupees have been collected,” the Nepali Congress said in a statement issued after its central working committee meeting on Monday. “In this context, the government decision to award the project to China Gezhouba was nontransparent, objectionable, and surprising.”

This is the first official reaction from the NC on the project after the KP Sharma Oli administration last month instructed the Ministry of Energy and Water Resources to renew negotiations with the Chinese firm.

Former Finance Minister Ram Sharan Mahat said the way the government decided to renew negotiations with the Chinese company without competitive bidding has made the whole process very opaque. “First, why was the competitive bidding process was skipped?” he asked.

“Second, developing the project on engineering procurement construction and financing model will make the project very expensive and we will fall in serious debt burden. And third, the track record the Chinese firm in Nepal is not good.”

According to Mahat, most Nepalis do not know the exact modality of developing a project under the engineering procurement construction and financing (EPCF) model. “That is why we have to pay huge money as interest and capital used to develop the project. So our position on the Budhi Gandaki Project is clear: it should be developed on our own internal resources whose process has already begun and the project’s detailed study is also completed,” said Mahat.

After scrapping the agreement with Gezhouba, the Deuba government had formed a panel led by Swarnim Wagle, then vice chairman of the National Planning Commission, to look for financing options to build the project. The Wagle-led panel had concluded that the project can be developed through domestic investment and proposed the developing model as well. Several NC members called the government decision shoddy and highly objectionable. “Before awarding the project to any firm, there are certain established norms and procedures. The new decision whose intent was very wrong is against the national interest,” the NC statement reads.