Besides scrapping the deal, Nepal has also given Indian firms GMR Energy and Sutlej Jal Vidyut Nigam, who are developing hydropower plants in Nepal six more months to bring financial closures to the projects
In a blow to Chinese efforts to increase influence in the sub-continent, Nepal has cancelled its 1200-MW hydropower project which was awarded to a Chinese firm.
The decision to cancel the Budhi Gandaki hydropower project that was to be completed by the Gezhouba Group came on Monday based on instructions from several parliamentary committees, a report in Hindustan Times said.
The project met with severe criticism from across the country. Signed during the last days of Nepal's previous government, led by Pushpa Kamal Dahal who was also known as Prachanda, the deal was made without conducting any competitive bidding.
The project faced opposition since inception mainly due to largescale land acquisition requirement for the project and also because of the shady performance of Gezhouba Group.
The group has been black-listed for its track-record in previous projects. Political parties, leaders and local entrepreneurs had opposed the move vehemently and the country's Deputy Prime Minister Kamal Thapa even openly tweeted against the project.
Besides scrapping the deal, Nepal has also given Indian firms GMR Energy and Sutlej Jal Vidyut Nigam, who are developing hydropower plants in Nepal six more months to bring financial closures to the projects.China has also not been able to impress the ruling government in Nepal after it was alleged that Beijing had played a role in bringing together the communist parties in the country to work together in the upcoming elections. The development is being seen as a speed bump in China's efforts to accentuate its hold in Nepal.