(1) If the proposer does not submit the details within the time period as per sub-section (1) or (2) of Section 11 or if it is not found feasible and appropriate to implement the project after studying the details so submitted, the Government of Nepal shall open a memorandum of understanding or an initial project agreement with the proposer as the reason for such a memorandum of understanding or If the initial project agreement and memorandum of understanding or initial project agreement is not reached, his proposal may be cancelled.
(2) If the MoU, preliminary project agreement or proposal is canceled according to sub-section (1), the proponent shall not be entitled to claim compensation for any kind of loss from the Government of Nepal.