Investors Suffer Due To NEA


    NEA_BuldingSanima Mai Hydropower Project (22 MW) completed by Sanima Mai Hydropower Limited has not come into operation with the Nepal Electricity Authority (NEA) delaying construction of transmission line.

    Sipring khola Hydropower Project (10 MW) constructed by Synergy power in Dolakha has not come into full operation also in lack of transmission line.

    Robust Energy has not been able to start construction of Mistrikhola Hydropower Project (42 MW) in lack of transmission line in Kaligandaki corridor.

    Lower Solu (82 MW) and Solu (23.5 MW) to be constructed in Solu corridor seem set to be affected with the NEA not paying attention to construct transmission line in the corridor.

    Electricity to be generated by Rasuwagadi (111 MW), Lower Sanjen (42.5 MW) and Upper Sanjen (15 MW) to be constructed under Chilime Hydropower Company Limited also looks set to be wasted with work for constructing transmission line in Chilime hub yet to start.

    Investment of completed, under-construction and other projects that have signed power purchase agreement (PPA) are under risk with the NEA not expanding necessary transmission lines in time. Investment of billions of rupees made in different projects to be constructed in the coming five years looks set to be lost if the NEA does not immediately take solid steps to expand transmission lines. The NEA will also have to pay compensation of five to 45 percent amounting to billions to the projects whose electricity will be wasted in lack of transmission lines, even as the country will continue to face energy crisis.

    Extreme negligence in construction of transmission lines by the NEA and government has been hindering hydropower development in the country in the past few years. The NEA has not completed any transmission line project in time until now while there is little chance of even those under construction being completed in time. Delay in approval from the Forest Ministry, problems in land acquisition, local obstruction and compensation dispute, and delay by the NEA has been affecting expansion of transmission lines.

    The NEA has not completed 220 KV Khimti-Dhalkebar Transmission Line 10 years after starting construction. Electricity to be generated by under-construction Upper Tamakoshi Hydropower Project will also be wasted if work for the transmission line is not completed within the coming year. The government has allocated adequate budget for expansion of transmission lines in the recent fiscal years with Rs 13 billion allocated in the current fiscal year alone. There has been delay in construction of transmission lines due to lack of willpower of the government despite donors like the World Bank (WB) and the Asian Development Bank (ADB) assisting the government in expansion of transmission lines. Projects with combined installed capacity of 1,200 MW are currently being developed by the private sector, NEA and its subsidiary companies.

    Sanima Mai has not been able to generate electricity losing tens of millions in revenues (at the rate of Rs 650 million a year) as 132 KV Transmission Line from Damak, Jhapa to Godak of Ilam has not been completed in time. Electricity from the project should have been transmitted since last June as per the PPA signed with NEA. Director of the company Dr Subarna Das Shrestha says the new date for completion of the transmission line has yet to be set more than seven months after the deadline. He claims there will be further delay as half of the work has yet to be completed. “Bank capitalizes interest up to mid-January. There will be problems if we do not regularly repay principal and interest after that. The company cannot repay loans without generating electricity and selling it,” he elaborates. Work is being done to connect electricity through 33 KV transmission line near Godak to connect to the national grid in coordination with the NEA after the delay in Damak-Godak transmission line but even that is being delayed.

    Similarly, the NEA will have to pay Rs 2 billion to two hydropower projects alone to be constructed in Solu corridor after four years as it has not started construction of transmission line in time. Under construction Lower Solu and Solu will have to be compensated by the NEA as it has yet to start construction of the 90-kilometer 123 KV transmission line from Mirchaiya, Siraha to Lamane of Solukhumbu. Promoters of these two projects claim that they will complete construction within the scheduled deadline of 2018 even as the transmission line is set to be delayed by a year.

    The NEA has not even invited bids even as the promoters have started project work. The PPA signed between the NEA and the promoters state that the NEA will have to pay 45 percent in compensation if it fails to construct transmission line in time while the promoters will also have to compensate the NEA at the same rate if they delay construction of projects. Promoters demand that the NEA officials not fulfilling their duty that can ultimately force the NEA to pay the amount in compensation should be punished. They feel that the Commission for Investigation of Abuse of Authority (CIAA) should pay attention toward that. The NEA, meanwhile, has relaxed qualification criteria for contractors to take part in the bidding process at a time when construction of the transmission line is delayed raising doubts about completion of the project in time. Environment has been created to allow inexperienced contractors to take part in the bidding process by relaxing the criteria set by consultant Lahmeyer India.

    Chief Executive Officer (CEO) of Upper Solu Hydroelectric Company Shashi Sagar Rajbhandari says investment on the project is under risk as the transmission line will not be completed in time. “The 45 percent of compensation will not even suffice to pay bank interest. There are other administrative expenses and investment on top of that,” he says. “There is no meaning of constructing the project in time if the NEA does not complete the transmission line in time,” he adds. Director of Essel Clean Solu Hydropower Ashish Garg also complains that the project will be delayed due to the NEA. “No hydropower and transmission line project constructed by the NEA has been completed in time until now. The current activities also point toward that,” he says. The promoters had aimed to start construction in 2011 and complete them this year. They had to waste three years to prepare working plan for the projects and PPA due to negligence of the NEA.

    Mistrikhola Hydropower Project being developed by Robust Energy will also be delayed by a year in lack of transmission line in Kaligandaki corridor. Promoter Robust had signed PPA with the NEA to complete the project in July, 2016 but a new deadline of December, 2017 has been set after the delay by NEA to construct transmission line in the corridor. The NEA has started construction of transmission line now but there are doubts as to whether it will be completed within the stipulated time. Cost of the project has increased by Rs 500 million due to the delay in transmission line.

    Managing Director (MD) of NEA Mukesh Raj Kafle concedes that construction of transmission lines has been delayed due to different reasons. He attributes the delay to the time taken in receiving permission from the Forest Ministry, obstruction by locals, and compensation dispute. “Construction of proposed transmission line projects has gathered momentum. We are committed to completing the transmission line projects in time. There was delay in construction of transmission line until a few months ago. But there will not be such problems now,” he states. He reveals there has been progress in construction of transmission lines in Solu corridor, Kaveli hub, Hetauda-Duhabi, Hetauda-Bharatpur-Bardeghat, Kathmandu-Trishuli, Dhalkebar-Bhitthamod-Muzaffarpur. He says construction of Khimti-Dhalkebar transmission line has not moved forward due to obstructions owing to problems in land acquisition, and forest and environment ministries.

    Source : Karobar Daily