Completion date of Chameliya Hydro Project pushed back

KATHMANDU, APR 27 –

ChameliyaThe completion date of the Chameliya Hydropower Project has been pushed back four years due to the contractor’s poor performance, the project’s geographic situation and the country’s political situation.

The 30 MW project, located in Darchula district in central Nepal, was originally scheduled to be completed in 2011. The deadline was postponed to August 2013 and then extended again to March 2015 due to poor progress.

A senior official of the Nepal Electricity Authority (NEA), the developer of the project, said that that new deadline was set after discussions between the NEA, the project consultants and the contractor. “We have sent the rescheduled date to Exim Bank of Korea, the financer to the project, for its approval,” said the NEA official. In addition to Exim Bank of Korea, the government and the NEA have also invested in the project.

About a month ago, a field study done by the Economic Development and Cooperation Fund (EDCF), the South Korean aid agency that manages Exim Bank, predicted that the project would miss its completion date.

The NEA and project officials said that construction would be further delayed due to two reasons: The ongoing construction work on the tunnel requires treatment due to a squeezing at 840 m, and the penstock will be made of steel instead of roller-compacted concrete as originally planned.

“The month-long banda called in May 2012 before the Constituent Assembly was dissolved also hampered work at the project,” said Project Chief Rajendra Manandhar.

However, the EDCF blamed the poor performance of the Chinese contractor assigned to do the civil works including digging the tunnel for the delay. In its assessment report after the field visit, the EDCF said that the delay in civil works had affected the electro-mechanical works too.

The Korean assessment found out that the civil works preceding the electro-mechanical works had been delayed due to the contractor’s “low priority, less profitability” attitude. Chinese contractor China Gezhouba Water and Power (Group) Company is doing the civil works that include building the intake, penstock tunnel and powerhouse.

A Korea joint venture named KHNP Consortium — consisting of Korea Hydro & Nuclear Power Co, Hwachon Plant Construction Co, Sean Engineering and Construction Co — and Nepal Hydro & Electric are handling the electro-mechanical job. Officials said that construction of transmission lines has also got nowhere particularly due to a row over compensation for acquired land.

Manandhar said the compensation issue is yet to be settled at many places. According to him, installation of transformers has almost been completed, and construction of 30 percent of the 131-km transmission line has also been completed.

The team concluded that 84.3 percent of the civil works have so far been completed while progress on electro-mechanical works has reached 80 percent. The EDCF has also demanded a feasible action plan for the project’s completion after assessing its progress.

As the Chameliya Hydropower Project is certain to be delayed, the government is preparing to ask Exim Bank of Korea to reschedule its loans for one more year based on the expected completion date. The Korean bank reimburses the expenditure made on the project with domestic resources.

“As financing is made based on the progress of the project, Exim Bank of Korea should also reschedule its deadline for financing,” said a senior Finance Ministry official.

Due to delays in the project, the cost is also going to rise. For this reason, the ministry had asked the Korean bank about a year ago to provide additional funding of US$ 15 million for the project to cover cost overruns. Out of the total project cost of Rs 12.5 billion, Rs 8.6 billion has already been spent, according to the project.

“We are yet to get a clear commitment from the Korean side whether they will provide additional resources,” said the ministry official. “They are of the view that they don’t have a custom of providing extra financing for projects that get delayed.”

He added that the Korean bank had also sought specifics regarding the purpose of the additional aid and when these works will be completed.

Source : The Kathmandu Post