| KATHMANDU, April 2
KATHMANDU, April 2 A parliamentary panel cleared
the way for a Chinese company to build a $1.6 billion
hydroelectric plant in Nepal, the Himalayan republic's biggest
foreign investment programme, Nepali officials said on Monday.
Nepal's Maoist-led government 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
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.
Two weeks ago, the Natural Resources and Means Committee of
the parliament, asked for the project work to be halted due to
allegations of irregularities in awarding the contract to the
Chinese company without any international bidding.
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.
"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.
Officials from the Chinese firm were not available for
Nepal's economy grew 3.5 percent in 2010-11, down from 4.8
percent in the previous year with the country facing 14 hours of
daily power cuts during the dry season when its rivers flow
Aid-dependent Nepal, with 900 megawatt of electricity
shortage, is one of the world's 10 poorest countries where
tourism and hydropower are two key areas in which the government
is trying to attract foreign investment.
(Editing by Satarupa Bhattacharjya and Alison Williams)