Chinese Infrastructure projects in Nepal running way behind schedule

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    August 31 : China-led Infrastructure projects in Nepal which were announced with much fanfare are running way behind schedule according to Nepalese officials who are concerned that China is not living upto its commitments.

    The projects running behind schedule include three hydropower projects- the West Seti Hydropower Project, the Kulekhani 3 Hydropower Project and the Budhigandaki Hydropower Project. There was no international bidding for the West Seti project, which includes the construction of a 750 MW power generation unit, and the project was awarded to China Three Gorges International Corporation (CGTC) in 2012. However, there was no progress in the project up to 2016, following which the Nepal government threatened to scrap the deal. As a result of this threat, in January 2017 CTGC signed a framework agreement with Nepal Electricity Authority.

    However, the project still hangs in limbo due to delay in ratification this agreement. Similarly, the Kulekhani project, awarded in 2008 to Chinese companies Zhejiang Jiahi and Sino Hydro, was to have been completed in 2012. Till date, the project is still nowhere near completion and due to the delay there has been a cost overrun from the initial estimate of Rs.2.43 billion to Rs. 4.22 billion.

    Nepal has always been welcoming to Chinese overtures to build infrastructure projects in the country and one of Beijing’s staunch supporters on the one belt One Road Initiative. As a result, multiple infrastructure projects have been awarded to Chinese companies by successive Nepalese governments, some even without following laid down government guidelines.

    However, very few are aware of the problems that plague many of these projects. As per Nepalese government officials involved closely with these projects, many of them are way behind schedule and often not being completed as per the agreed terms. According to these officials, the primary problem with Chinese projects is that majority of these projects have been secured either by quoting unrealistic bids or through political/diplomatic pressure by China on our government. As a result, the quality and time schedule are never a priority for these Chinese companies.

    Also facing problems are the international airport project in Pokhara and Gautam Budhha Airport Upgradation Project. Through foundation stone for the airport at Pokhara was laid in April 2016 by the then PM K.P. Sharma Oli, work has only started in August 2017, a delay of 15 months. Chinese company involved, China CAMC Engineering, that had earlier agreed to complete this project by 2020 has now pushed the completion date to 2021. Similarly, the Gautam Buddha Airport Upgradation project, awarded to China’s Northwest Civil Aviation Airport Construction Group in October 2014, was to have been completed by December 2017. This deadline was changed to 2019. However, as on date, only 25 per cent of the work has been completed largely due to the initial heavy under bidding for the project by the Chinese company. The government is actively considering cancelling the contract.

    With such a poor track record, much thought needs to be given before awarding projects to Chinese companies. Also the government needs to guarantee that laid down guidelines for awarding projects to international companies is carefully followed in order to ensure the contract is awarded to the most deserving bidder, say high level Nepalese officials.