Chameliya dispute ends

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    ” KHNP, NEA reach agreement “

    KATHMANDU, Oct 27

    ChameliyaKorea Hydro and Nuclear Project (KHNP) Consortium–contractor for electromechanical, hydromechanical and transmission line construction of Chameliya Hydropower Project– has taken back the decision of terminating the contract after the Nepal Electricity Authority (NEA) agreed for payment of claims.

    The uncertainty about the project has ended following the agreement reached with an understanding that the problems seen in the project will be solved by February 12, 2014. KHNP has stated that it will resume works following discussions in presence of South Korean EXIM Bank and consultant Sammon. NEA has agreed to immediately pay US$ 2.97 million to KHNP for cash flow. Consultant Sammon will reevaluate the claims for the extended period from September, 2013 to March, 2015 and recommend for payment. Similarly, agreement has also been reached to prepare report for payment and submit it to NEA by November 9. KHNP has also extended its guarantee period to February 12, 2014. KHNP had unilaterally terminated the contract in August stating that it has not received payment for claims from NEA. The project has been stalled since then raising its cost.

    Cost of the project, that was originally set to be built at Rs 7 billion, has almost doubled to around Rs 13.90 billion due to the delay. The Korean company had claimed US$ 13.08 million stating that the project was delayed due to civil contractor for the project China Gezhouba Group and NEA. The consultant Sammon had recommended NEA to pay US$ 8.5 million for the delay a year ago. The deadline was first extended from December, 2011 to August, 2013 due to the delay in civil construction and it has again been extended to 2015 after problems of shrinkage in the tunnel. NEA and KHNP had signed agreement in 2009 for hydraulic, eletromechanical, and construction of transmission line and substation. Korean EXIM Bank has provided soft loan of US$ 50 million for the project.

    The estimated cost of the project when it was started was US$ 99.90 million (around Rs 7.19 billion) including civil, eletromechanical, hydromechanical and transmission line construction, land acquisition, and compensation. NEA and China Gezhouba Group had signed contract agreement to start civil construction in January, 2007 and complete it by December, 2011 at a cost of Rs 2.88 billion. Work is being done in the shrunken 843 meters of the project’s tunnel. NEA has raised the project cost by another Rs 1.30 billion due to additional work for the shrunken tunnel after it was adjusted to Rs 12.60 billion due to delay. The 30 MW project in Darchula will generate 180.40 million units of electricity a year.

    Source : Karobar Daily