China firm blacklisted by Chilime rewarded

KATHMANDU: Chilime Hydro Power Company recently blacklisted China Gezhouba Group Company for three years in a move meaning no procurement from the CGGC for the civil works of the 42.5-MW Sanjen Hydroelectric Project, a sister company of Chilime.

CGGC, the lowest bidder with Rs 1.5 billion in a procurement tender called by Chilime, had added different conditions after winning the contract, prompting Chilime to disqualify the firm from doing any business with SHP.

The project commissioning is due in December 2015.
Sources at Chilime said with the new development, chances of delay in completion of the project were high.
Earlier in 1999, civil works contract awarded to the same Chinese firm by Chilime was terminated and then the CGGC had lost $1 million security fund.
Source added that Chilime had started the process to award the contract for SHC’s civil works to the second lowest bidder, which is a Nepal-India joint venture company.
Meanwhile, the Cabinet today decided to upgrade the Upper Trishuli 3A. CGGC, now blacklisted by Chilime, is the contractor of the Upper Trishuli 3A Project as well.
The Nepal Electricity Authority, the developer of the project, had objected to earlier requests of increasing the capacity of the 60-MW project by 30 MW. NEA had turned down the requests saying it would benefit the contractor only, and not the country, as the project would be delayed if its capacity was increased.

Former energy minister and CPN-UML leader Gokarna Bista said the Cabinet decision was flawed and that NEA could incur a loss or Rs 10 billion due to the delay in the completion of the project. Former energy minister and Nepali Congress leader Prakash Sharan Mahat, during whose tenure the contract was awarded to CGGC, said the company had then proposed $111 million for the 90-MW project. “But the government now has decided to increase the capacity with additional $21 million, which is purely in the interests of the contractor, as well as Prime Minister Baburam Bhattarai. The government decision is against the procurement law,” alleged Mahat.

Source : The Himalayan Times