Contractor for Rahughat hydro project demands more money

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    MYAGDI, JAN 02 –

    IVRCL Infrastructure, the India-based contractor building the Rahughat Hydroelectricity Project, has stopped work for the last one month demanding a revision of the contract amount. IVRCL has been carrying out the civil engineering work at the 32 MW project located in western Nepal for the last two years. The company has been contracted by the Nepal Electricity Authority (NEA) to construct a 12-km access route, a 7-km tunnel, powerhouse, dam and search tank, among other structures. The Rahughat Hydroelectricity Project is funded by a grant and soft loan from the Indian government.

    Raj Bista, a civil engineer who is also the site in-charge, said that the contractor had created hassles at a time when the main engineering work was supposed to start. According to him, the project has already acquired a resident quarter, crusher plant and land as per their agreement. “We have sent a letter requesting the contractor to start the construction work soon,” he added.

    IVRCL has stopped work on the project demanding a review of the price. The contract for the Rahughat Hydroelectricity Project is worth Rs 2.5 billion. According to the NEA’s site office, the contractor has asked for a review of the workers’ wages, transport charges and cost of construction materials saying that almost all of them have become dearer compared to the rate agreed in 2010 when the contract was signed.

    Meanwhile, IVRCL has denied halting work on the project. “The work is going on at a slower pace, but it has not been stopped completely,” said the company’s administrative manager Udaya Bindu Sharma. He declined to comment on the talks going on at the higher levels. “We have not received any information on stopping the construction work,” he said.

    As per the agreement, a crusher has already been installed at Piple, Chamere. Likewise, the track road from Piple-Mauwafaat has been constructed. IVRCL, however, has blamed the stakeholders for hindering the company’s work. The dispute has reached the high-level committee that includes the contractor’s representative, NEA chief, chief secretary, finance secretary and energy secretary. Although the Rahughat Hydroelectricity Project is a highly anticipated project by the locals, political parties, civil society and entrepreneurs, the dispute between the NEA and the contractor has delayed completion of the project.

    Pramod Shrestha, central member of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), said a solution to the disagreement is being worked out at the central level. “It will be unfortunate if the project were to be discontinued under any pretext,” he said.

    Source : The Kathmandu Post

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    NEA to hold talks with Rahughat project developer

    KATHMANDU, Jan 1 : The Nepal Electricity Authority (NEA) has formed a high-level committee to hold dialogues with IVRCL Infrastructures & Projects Ltd, an Indian company that bagged the contract for developing Rahughat Hydroelectricity Project (32 MW), but has stalled works demanding upward revision of costs.

    “We study the situation and hold dialogues with IVRCL,” said Managing Director of NEA Rameshwore Yadav, who is heads the committee formed to hold talks with the Indian company. “We will also study whether such projects benefit NEA.”

    The four-member committee that will hold dialogues with IVRCL also has the mandate to decide whether or not to revise the cost of the project, according to NEA officials. “I can´t say anything now but we may have to make an upward revision of costs if we want project to complete,” an official from NEA said on condition of anonymity.

    NEA, which is developing Rahughat with soft loans from Exim Bank of India, is also mulling to stop developing small scale projects. “We are thinking not to handle projects with the capacity of less than 100 MW,” Yadav said. “These kind of small projects only kill the time and resources of NEA.”

    IVRCL has halted the project works for a month demanding cost adjustment with increased prices. The project was awarded to IVRCL in November 2010 and was expected to complete in 42 months. “We think it too late now to make a cost adjustment,” Yadav said.

    According to NEA officials, the government had signed a contract agreement worth Rs 2.5 billion with IVRCL. “IVRCL is pressing us for cost readjustment two years after signing the contract agreement. This is not ideally acceptable,” an official of the project said.

    The locals have pushed for early completion of the run-of-the-river project is based in Myagdi — a hilly district in mid-western part of the country. “This is completely an issue between NEA and contractor IVRCL,” Dilip Poudel, Republica´s Baglung based reporter said over phone. “Locals want this project to be completed on time.”

    Source : Republica