When the 70MW Middle Marsyangdi project started five years ago, it was touted as one of the most important and least expensive hydroelectricity projects in Nepal. But work on Middle Marsyangdi has stopped and the project is on the verge of collapse.

Over 75 percent of the work on Middle Marsyangdi is finished, and only the power station remains to be completed. Work on the project has stopped because of pressure from the German contractors, locals, and Maoists. As a result of their selfishness, the government is losing over Rs 100 million every week.

Although the project started with German assistance, due to numerous irregularities, it is now estimated that it will cost double the original estimate of over Rs 13 billion. Foreign assistance may sound attractive, but it comes with conditions.

The contractor, DDC JV, has already collected millions of rupees and numerous cases related to the project are still pending against the government. By the time just a quarter of the work was complete, over Rs 21 billion had already been spent.

As the cost of the project has skyrocketed, locals saw it as a source of free money and began milking it. The government had said that it would be benefit the local community, and had set aside Rs 250 million for schools, drinking water, a road, rural electricity, and health posts. That money has been grossly misused by the locals-Rs 30 million was spent on the construction of one school building, and now, another is being put up.

When a parliamentary committee visited the region recently, it said there is no alternative but to finish the work swiftly. They also recommended that in future the government do its homework before signing agreements on assistance for such big hydro projects.

The Minister for Water Resources Gyanendra Bahadur Karki, and managing director of Nepal Electricity Authority, Arjun Karki insist that work on Middle-Marsyangdi can be completed on time. A highly-placed source says negotiations are going on between the government and the Maoists, and that both sides are worried about the ongoing strikes. It's anybody's guess when the work will resume.