KATHMANDU, Dec 25: In response to the cancellation of the consultant selection process for Tanahu Hydropower Project by Minister for Energy (MoE) Radha Gyawali, Minister for Finance Ram Sharan Mahat has decided to ask the former to reconsider the decision and has corresponded with MoE over the matter.
Minister Gyawali on December 2 canceled the consultant selection process carried out by the Asian Development Bank (ADB), questioning the process and citing MoE´s internal review committee and a directive of the Commission for Investigation of Abuse of Authority (CIAA). The decision threw the 140 MW project into uncertainty and donors have since shown serious concern over it.
MoF returned MoE´s file a day after Prime Minister Sushil Koirala had a discussion with CPN-UML leaders, ministers and Nepali Congress leaders.
Madhu Marasini, joint secretary at MoF, said that the finance minister took the decision as canceling the selection process was a high-risk step that could lead to donors stepping back and throwing the project into uncertainty.
The decision was against the bilateral agreement with ADB, it would cause cost overruns in the course of a fresh selection process and there were also fear of donors walking away from the project, throwing into doubt progress in several areas including the US$ 505 million project loan agreement.
ADB was asked to undertake the consultant selection in order to expedite the project. A joint review committee of the ADB, MoF and MoE formed to study the consultant selection process has stated that it did not find anything that calls into question the credibility of the ADB´s process, and the CIAA also later changed its statement, suggesting that the same consultant could be picked.
ADB, the European Development Bank (EIB) and JICA are co-financers of the project developed by Tanahu Hydropower Limited, a subsidiary of Nepal Electricity Authority.
Following the cancellation decision, about a dozen lawmakers from Tanahu, the district where the project is located, have piled pressure on the government to consider the project´s importance and act accordingly.
ADB had selected a joint venture of Lahmeyer International of Germany and Manitoba Hydro International of Canada and recommended it to the ministry for selection. But a directive from CIAA and an MoE internal review were taken as the basis for rejecting the selection, pointing out that the selected company lacked essential project-specific experience in sediment flush management.
Energy Secretary Rajendra Kishore Kshetri confirmed receipt of the decision and said they are yet to hold discussions on the MoF response as Minister Gyawali returned to Kathmandu from Butwal only on Wednesday evening.
Source : Republica