Govt rejects ADB’s pick for Tanahun Hydro consultant

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    Cites lack of experience

    KATHMANDU, Dec 19 :The government has refused to appoint the consultant selected by the Asian Development Bank (ADB) for project supervision at the US$ 505 million storage-type Tanahun Hydropower Project, faulting the evaluation process as well as the Request for Proposal (RFP) document, the latter for missing out essential qualifications.

    Tanahun-Seti

    Energy Minister Radha Gyawali took the decision on Wednesday, bringing to an end the indecision and wrangling for about six months following two separate review committee reports on the selection process. Officials at the Ministry of Energy (MoE) say the minister’s decision states that the government, acting on the basis of a review carried out as directed by the Commission for the Investigation of Abuse of Authority (CIAA) and a review committee report prepared by MoE Joint Secretary Keshav Dhwaj Adhikari, could not agree with the evaluation by ADB.

    Following complaints filed by the locals of Tanahun against the ADB selection, the CIAA in July had asked MoE to review the recommendation to select a joint venture of Lahmeyer International of Germany and Manitoba Hydro International of Canada.

    Adhikari’s review committee found the evaluation system unfair, favoring only the JV of Lahmeyer and Manitoba over the Kansai-NEWJEC JV, the second in line in the selection process.

    Sources at MoE say that the Project Administration Manual agreed between ADB and MoE stressed prioritizing those experienced in sediment flushing and sluicing, a specially required feature of the project. However, this was missing in the selection criteria and RFP.

    Officials said that Lahmeyer and Monitoba have no experience in sediment flushing and sluicing. A joint committee formed by the Ministry of Finance (MoF) and comprising retired government officials Birendra Bahadur Deuja and Dinkar Sharma and representatives of the ADB also found mistakes in the selection process.

    The decision will be forwarded to ADB through MoF. In response to Republica’s query on a response to MoE’s decision, Minister for Finance Ram Sharan Mahat said the decision is yet to be received.

    In an earlier decision sent to MoF in October, MoE had asked MoF to find alternative sources of funding for the project if ADB funds are not provided. The government had signed a loan agreement with ADB for US$ 150 million in February, 2013 and the co-financers 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 Tanahun Hydropower Limited (THL), a subsidiary of Nepal Electricity Authority (NEA).
    MoE has decided to start fresh consultant selection, a process which was expected to be completed in May last year, and the delay is sure to result in cost overruns.

    In an email response to Republica on the government’s decision, ADB’s senior External Relations Officer Binita Shah Khadka said, “We have not heard from the Government of Nepal on their official decision.” ADB further stated, “We are hopeful that this very important project will move forward. The project, we believe, is key to developing Nepal’s vast potential for hydropower and helping to generate clean, year-round electricity when the country is reeling under severe power shortage.”

    Source : Republica