Last month, a group of former finance and energy ministers had met Prime Minister Baburam Bhattarai to protest the plan and the prime minister had assured that they would be consulted before any decision is made on the project.[break]
"This is an outrageous decision of the government which will further deepen the crisis of confidence among political parties," Ram Sharan Mahat, former finance minister and central working committee member of Nepali Congress, said.
"The president should immediately sack the prime minister," Mahat fumed.
The run-of-the-river project, which is being developed by a Chinese contractor, China Gezhouba group Co, with a US$ 89 million soft loan from the Exim Bank of China, will produce the extra energy only during the wet season and so it will not help reduce the load-shedding during the dry season.
"This is outright looting of state coffers and the people have been cheated by the government," Mahat told Republica.
The government that was mulling increasing the capacity of the project for the last few months has failed to convince the opposition and related officials from the Ministry of Energy (MoE) and Nepal Electricity Authority (NEA). The board of directors of the Nepal Electricity Authority had twice rejected the upgradation plan.
The government even sacked Dr Krishna Prasad Dulal from the board reportedly for opposing the plan. But even after his sacking the board refused to approve the plan. So the Ministry of Energy had forwarded the proposal to the cabinet by bypassing the NEA board.
Hydropower experts have lambasted Thursday´s government decision. "We clearly smell financial irregularities in the government decision," Ratna Sansar Shrestha, an energy expert, told Republica.
"The contractor had initially agreed to develop 90 MW for US$ 111 million. And, now the government has agreed to spend US$ 132 million for the same capacity," he said. According to Shrestha, the cost of hydropower generation is always on the decline due to falling cost of machinery and equipment. The government had awarded the project to the Chinese contractor to develop 60 MW at US$ 89 million.
Gokarna Bista, former energy minister and CPN-UML leader also echoed experts. "There might have been financial irregularities worth around Rs 2 billion," Bista said. "Additionally, this decision will further delay the project by three years, which means the upgradation is meaningless."
Bista further added that the NEA will be losing in the long term due to this insensitive decision of the government.
"This is completely a ´nonsense´ decision of the government and it will hurt NEA badly," an NEA official said on condition of anonymity.
Dr Prakash Chandra Lohani, former finance minister and co-chair of the Rastriya Janashakti Party, said that the government has been involved in financial irregularities.
"The government has given more than the contractor initially asked for to develop the project," Lohani said. "Furthermore, this project is not going to relieve us from the acute power shortage in the dry season since it generates extra power only in wet season."
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