Govt picks Lahmeyer-Manitoba JV as Tanahu hydro consultants

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    ADB has pledged to address MoE´s concerns: Minister Gyawali

    Tanahun-SetiKATHMANDU, Jan 2: Thursday´s cabinet meeting reversed the decision of Minister for Energy Radha Gyawali to reject the project consultants picked by the Asian Development Bank (ADB), clearing a controversy that has been going on for five months.

    Minister Gyawali had twice taken an official decision rejecting Lahmeyer International of Germany and Manitoba Hydro International of Canada, which were picked by ADB as consultants. She cited the consultants´ lack of experience in special qualifications relating to sedimentation and flushing management.

    After the cabinet meeting, Gyawali herself briefed the media and said the cabinet changed her ministry´s decision after ADB came up with a commitment to address its concerns.

    “I had decided to reject the consultants on the basis of a study report carried out by my ministry and by a joint study team,” the minister said, defending her decision.

    “ADB also pledged to address concerns relating to technology and timely completion of the project without incurring any cost overruns,” Gyawali told media.

    Talking to Republica, ADB Country Director Kenichi Yokoyama said, “ABD will provide full support for timely implementation of the project and quality assurance as well as sustainable operation and maintenance of the project.”

    Following the minister´s second-time decision of December 17 to reject the consultants and start a fresh selection process, a serious debate had erupted, with one side saying ADB was unfair in the consultant selection process while the other side which included lawmakers from Tanahu district were in favour of the donor´s decision and argued that minor issues should not hold back the project nor the investment friendly environment hampered.

    The 140 MW project on the Seti River is of reservoir type and it has already signed loan agreements with three different co-financier including the ADB. Its project cost is put at US $ 505 million.

    Upon Minister Gyawali´s rejection decision, Finance Minister Ram Sharan Mahat on December 24 had written to the former to reconsider her decision, saying the Finance Ministry, the line ministry tasked with dealing with donor agencies for the project, was not consulted. He also voiced reservations over the decision. “The decision would leave a long-term impact on dealings with bilateral and multilateral donors,” MoF officials had quoted the finance minister as saying.

    However, it is learnt that the issue was brought to the cabinet after the energy minister did not wish to retract her decision although she herself had raised the matter in the cabinet.

    Prime Minister Sushil Koirala also discussed it repeatedly with senior leaders of the CPN-UML, including KP Oli and Jhalanath Khanal, and members of his cabinet and directed Minister Gyawali to withdraw the decision. ADB officials had said, “Minister Gyawali´s decision was a deviation from the loan agreement.”

    The Commission for Investigation of Abuse of Authority (CIAA) had issued a directive to review the selection process following a complaint questioning the experience of Lahmeyer and Manitoba in sediment flushing and sluicing. Kansai-NEWJEC JV was second in line in the competion for the consulting services worth US $ 27 million.

    A review committee led by Joint Secretary at the Ministry of Energy, Keshav Dhwaj Adhikari, had questioned the marking system as only favoring the selected consultants as well as not taking into account sedimentation management, a major feature of the project.
    Following Minister Gyawali´s September 24 decision, a joint committee comprising officials of MoE and MoF and ADB representatives looked into the matter and did not find anything to question the credibility of the ADB selection process.

    ADB was asked by the government to select the consultants so as to speed up the process.

    The government had signed a loan agreement for US$ 150 million with ADB in February, 2013. The co-financers of the project are Japan International Corporation Agency (JICA), the European Investment Bank (EIB) and the Abu Dhabi Fund for Development (ADFD). The project is being developed by Tanahu Hydropower Limited (THL), a subsidiary of Nepal Electricity Authority (NEA).

    Source : Republica