In the last four months, three Chinese investment proposals have landed in a controversy. In the last week of December 2011, Nepal government postponed negotiations with Chinese investors regarding the investment in Lumibni Development project.


The parliament’s Natural Resources and Means Committee (NRMC) has obstructed the entry of China’s Three Gorges Corporation International (CTGI) in development of West Seti Project, calling for rectification of a few legal and procedural lapses in the memorandum of understanding (MoU) with the Chinese company


However, the NRMC, which is currently probing the West Seti deal, has a list of conditions that it wants the government to honor. “We are for the development of the project as per the deal signed with the Chinese company by correcting shortcomings in the deal,” said Gagan Thapa, a member of the NRMC.


He added that the committee wanted to extract maximum benefits for the country in the West Seti deal.


NRMC chairperson Shanta Chaudhary echoed Thapa. “Terminating the MoU would cause more harm to the national economy. But we need to correct mistakes in the deal.”


Similarly, the Public Accounts Committee of the Legislature Parliament termed a bid, invited to develop regional international airport in Pokhara, as non-transparent. Finance Minister Barsha Man Pun was found to have signed a memorandum of understanding (MoU) with China CAMC Engineering Co, committing to support it to win the tender.


CAAN had invited bids from the Chinese promoted company on February 9, however, its decision to pledge 45 days’ timeline to respond to the bid call drew serious questions from different quarters.


"As the airport is being constructed under soft loans of China´s Exim Bank, it is okay to call tenders from Chinese contractors only. But who gave the authority to the FM or the government to make such a commitment on behalf of the country to support CAMC?" said Uapdhyaya.


Whether it is just a coincidence or geo-political game, Chinese investment is facing crisis in Nepal one after another. “It is shocking to know that Nepalese parliamentarians are blocking the investment proposal forwarded by Chinese. Our company came here to make Nepal prosper and economically viable,” said a senior Chinese diplomat on condition of anonymity. “We can see who is behind the controversy.”


Following the visit of Chinese prime minister Wen Jiabo to Nepal, China has shown interests to invest billions of dollars in Nepal’s tourism, hydro power and infrastructure projects. Despite the welcome accorded by the government to these possibilities, the parliament is creating hindrances.


“We have been here to support the poor people of Nepal and continue to be here to uplift their livelihoods. I think your members of parliament will also realize this,” said the Chinese diplomat. Sandwiched between Asia’s two big powers India and China, Nepal’s difficulty is to adjust with both for its own survival.