Construction work on the Middle Marsyangdi, one of the biggest current projects in the country, has been suspended indefinitely due to Maoist threats. The German-funded 70 megawatt project in Lamjung had ground to a halt since 6 November when Maoist rebels bombed a vehicle. The civil contractor, DDC-JV stopped work just like it had several times previously.

The Rs 14 billion project is owned by NEA which has now decided to suspend the work abiding by the project consultant, Fischner's, recommendation. "The contract agreement requires us to do what the consultant says," said the head of the Middle Marsyangdi project, Shashi Bahadur Shrestha. NEA officials said they have taken the idea of the project suspension positively because otherwise they would have to pay a hefty penalty of Rs 2.5 million every day to the civil contractor. But now that the project has been officially suspended, the NEA will not have to pay that amount.

The run-of-the-river project, which was designed to meet Nepal's power needs by 2005 is already delayed by two years. Now that the project has been suspended for an indefinite period, there is a danger of power cuts as well as the cost of restarting the project at a future date.