ADB disappointed over MoE decision

KATHMANDU, DEC 22 – Asian Development Bank (ADB) has expressed disappointment over the Ministry of Energy’s (MoE) decision to scrap the consultant appointment process for the 140MW Tanahun Hydropower Project.

The lender had selected a joint-venture between Germany’s Lahmeyer International and Canada’s Manitoba Hydro as the project’s consultant.

Energy Minister Radha Gyawali a few days ago scrapped the appointment process, arguing the consultant firm does not have experience in sedimentation flushing.

Sedimentation flushing is a process of removing clay deposits in the reservoir.

The ministry was of the view the ADB should have picked Japan’s Kansai Electric Power Company, another bidder, which is better experienced in the job.

However, an ADB source said it had selected the German-Canadian joint venture based on their holistic merits — including in the areas of tendering process, construction supervision and operational maintenance.

“I don’t know why the Energy Ministry just focused on sedimentation flushing, leaving behind other important aspects, including construction supervision,” said the source. “Obviously, the Japanese company has more strength in sedimentation flushing, but the firm that we picked was stronger in other two areas.”

The consultant will be involved in the project for 12 years from the tendering process. Tendering requires six months, construction supervision six years, and five years for operational maintenance after project completion.

The ministry’s decision has created uncertainty over the future of the storage-type project whose financial closure was concluded one and half years ago. The multilateral donor had picked the consultant last March.

According to ADB, it took the job of consultant appointment considering it may take a longer period for the government to select the consultant. “As per the loan agreement signed with the government, ADB is responsible for selecting the consultant,” said the ADB official.

Kenichi Yokoyama, ADB’s country director for Nepal, said the lender has not formally received the ministry’s decision.

After the dispute between the ministry and ADB, a joint review committee was formed without representation of individuals involved in selecting the consultant. The committee had concluded that there was no firm ground to question ADB’s selection of consultant.

After ADB selected the consultant, a complaint was registered with the Commission for Investigation of Abuse of Authority, questioning the consultant’s qualification.

The anti-graft body then directed the Energy Ministry for a review. The ministry formed a committee headed by its joint secretary Keshav Dhwoj Adhikari in August, which didn’t agree with ADB’s consultant selection. Then, the joint review committee was formed with representation from ADB, Finance Ministry and Energy Ministry. “But the Energy Ministry didn’t accept the review of this committee too,” said the ADB source.

For the project, ADB, Japan International Cooperation Agency and European Investment Bank have pledged loan assistance.

Source : The Kathmandu Post