Delays at Dhalkebar may hamper energy imports

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    Oct 5, 2017-The Nepal Electricity Authority (NEA) might have a hard time keeping the country free from power cuts during the upcoming dry season as planned imports from India are likely not to happen due to delays in the construction of the Dhalkebar substation.

    There is a very slim chance that the substation will meet its October completion deadline as the Chinese contractor for the project, Central Power Grid International Economic and Trade Corporation, has been fired, according to the NEA.

    “The NEA terminated the contract on September 22 after being fed up with deliberate delays in the construction of the substation by Central Power Grid International Economic and Trade Corporation,” said Prabal Adhikari, spokesperson for the state-owned power utility which is the implementing agency of the project. “We are yet to decide the next step following the termination of the contract.”

    As more than 90 percent of the construction work has been completed, it will be difficult for the state-owned power utility to find another contractor through global tender. “Reputed firms might not be interested in undertaking the job at such a late stage in the construction,” said Adhikari.

    The Chinese contractor has imported almost all the equipment installed at the substation, and if a new contractor is appointed, it will not be able to guarantee the quality of the equipment.

    The NEA has said it will soon decide the next step after consulting with the World Bank, the Washington-based multilateral lender which is financing the construction of the substation. “We will now hold consultations with the World Bank and reach a conclusion soon,” said Adhikari.

    As per the deal signed between the NEA and the Chinese company in June 2014, the substation should have been up and running by September 2015. However, deliberate delays by the contractor led to the deadline being extended for the third time to May 31, 2017, but that deadline too passed after it halted construction without notification.

    Energy Minister Mahendra Bahadur Shahi then extended the deadline to October, and directed the Chinese contractor to complete construction by that date, which led to work being speeded up and most of the goals being achieved.

    “However, there was no improvement in the contractor’s behaviour, and we had no choice but to terminate the contract,” said Adhikari.

    The Chinese company started exhibiting defiance after the NEA terminated its contract for the Bharatpur-Bardaghat 220 kV Transmission Line Project signed almost seven years ago.

    The contractor was originally supposed to complete the project in December 2013. However, after it failed to finish the project even after the deadline had been extended for the third time till June 2017, the NEA scrapped the deal.

    The Chinese contractor had asked the NEA to make a price adjustment, but as there was no such provision in the contract, the power utility terminated the contract. Since then, the contractor has been repeatedly halting work on the Dhalkebar substation using it as leverage.

    Source: The Kathmandu Post