KATHMANDU, Sept 24:

 The board meeting of Nepal Electricity Authority (NEA) on Tuesday decided to permit Hubei Sunlight Electric Co to replace all the transformers that it had supplied to the state-owned electricity distributor.

NEA board member Laxman Agrawal told Republica that the decision was taken as per the order of the Special Court during initial hearing into cases against NEA officials found involved in irregularities by purchasing transformers of inferior quality.

The NEA officials are believed to have connived with employees of Hubei Sunlight Electric to purchase substandard transformers inflicting loss of Rs 411.84 million on the power utility. NEA had purchased 1,995 transformers from the Chinese firm through two separate contracts in 2009 and 2010.

The firm had replaced 55 transformers last year after they malfunctioned. The board´s decision has paved the way for the Chinese firm to replace all the remaining 1,940 transformers. The company had proposed to the NEA to replace all the faulty transformers following the arrest of its two officials — Hu Zheng Qiang and Zou Yi Tian on August 21.

A total of 27 NEA employees, including managing director Rameswhor Yadav, are in judicial custody for their involvement in the procurement of substandard transformers.
During initial hearing into the multi-million rupees scam on September 17, the Special Court had ordered NEA to allow Hubei to replace all the transformers by following necessary procedures at the earliest and report to the court accordingly.

After the Special Court order, the Chinese firm on September 11 wrote a letter to NEA, proposing to replace all faulty transformers with the ones with copper winding.
However, it will take many months to replace all the transformers as they have been installed in electric poles in different parts of the country.

The Commission for the Investigation of Abuse of Authority (CIAA) has filed charge sheet against the officials for embezzling Rs 411.840 million. It has also demanded confiscation of property worth the same amount and sought a penalty worth the equal amount for those involved in the corruption.

While the CIAA has called for a 10-year sentence for all the accused NEA officials, it has demanded additional penalty and sentence in case of the top officials of the public utility as they were the decision makers. It has asked for a two-year sentence for the suppliers.

The court has sought Rs 175 million in bail from Hu Zheng Qiang and sought Rs 15 million from Zou Yi Tian.  The court said the Chinese firm had profiteered by supplying substandard transformers, which had aluminum coils instead of copper coils.

Source : Republica

——————————————————————————————————————————————————————-

Transformers of Hubei, JK Holdings to be replaced

KATHMANDU, Sept 24

The Nepal Electricity Authority (NEA) is set to get 2,584 substandard transformers procured from two Chinese companies replaced.

The board meeting of NEA held on Tuesday gave permission to the management to get substandard transformers bought from Hubei Sunlight Electric Company Ltd and JK Holdings replaced. The Special Court earlier had directed NEA to get such substandard transformers replaced with new ones. A total of 1,995 transformers procured from Hubei and 589 from JK will now be replaced. These companies had written to NEA stating that they are ready to get the substandard transformers replaced. “We are going to implement the order of Special Court. The process of replacing transformers will start now,” Managing Director (MD) of NEA Arjun Kumar Karki said. He added that NEA will call the manufacturers concerned for a dialogue for getting new transformers in place of the substandard ones. He also revealed that NEA will soon invite global tender for procurement of new transformers.

NEA does not have stock of transformers after revelation of the transformer scam, and is making do by getting the old ones repaired. NEA is not even in a position to install new transformers to resume electricity supply if any one of the installed transformers were to face problems. NEA engineers fear that such problems can arise at any time as the majority of transformers being used by NEA are old. The Commission for Investigation of Abuse of Authority (CIAA) has concluded that the majority of over 6,000 transformers procured from 2008 to 2012 were substandard. CIAA has lodged corruption case against 25 NEA staffers including sitting MD Rameshwore Yadav and former MD concluding that there were financial irregularities in procurement of those substandard transformers. CIAA has only investigated the transformers procured from Hubei and Sahabhant Electric Company Ltd of Thailand until now and is currently investigating those procured from other companies.

The transformer scam was revealed when examination of a damaged transformer of Sindhupalchowk, supplied by Hubei, 14 months ago showed it to be consisting aluminum winding instead of copper as per the contract agreement. NEA had initiated investigations forming a sub-committee under the then board member Dr Krishna Prasad Dulal following doubts about the quality of transformers procured after problems like catching fire, explosion, higher leakage and other complex problems were found in the transformers. The sub-committee filed its report stating that all the transformers procured from abroad were substandard and leakages were up to three times more than the standard rate. The report stated that transformers procured from Sahabhant were of the lowest quality and rated them as strongly rejected. Similarly, those procured from Shenyang Dongneng Electricity Equipment Company Ltd (China), SVR Electrical Pvt Ltd (China), Hubei and Nigwo AUX Hightechnology Company Ltd (China) were rated rejectable. The report states that NEA had procured over 6,500 transformers of varying capacities from these five companies since 2006.

Source : Karobar Daily

——————————————————————————————————————————————————————–

Board allows NEA to receive replacement

KATHMANDU, SEP 25 –

Nepal Electricity Authority ( NEA ) is all set to respond to the Chinese companies’ proposals to dispatch new sets of transformers as a replacement to the faulty ones that they had supplied earlier.

An NEA board meeting on Tuesday asked the NEA management to proceed ahead with receiving the new transformer sets. The meeting also decided that the suppliers be made liable to bear all the costs, including, shipment, transportation and customs duty.

Hu Bei Sunlight Electric Co and JK Holding had sent separate letters to NEA , admitting that they had earlier supplied shoddy transformers and pledging that they would dispatch new sets to replace the faulty ones unconditionally. The companies, however, have not mentioned anything about who will bear the aforementioned costs.

The Commission for the Investigation of Abuse of Authority (CIAA) has arrested 22 NEA officials and two Chinese nationals—Hu Zheng and Zou Yi Tian of Hu Bei—in connection with the transformer case. Another employee of the Chinese company, Li Dao Gu, has been absconding.

In the letters, Hu Bei has proposed dispatching 1,940 sets of new transformers, while JK Holding has pledged to supply 180 units by September 20-25.

The NEA , however, had not responded to the letters, stating it could not to take a decision as the case was under consideration of the CIAA and the Special Court. And, to clear the confusion, the NEA management committee had asked the board to take a decision on the matter. “The board meeting has paved the way for NEA to begin process to receive the new transformers from Hu Bei and JK Holding,” Energy Secretary Bishwo Prakash Pandit said.

NEA board member Laxman Agrawal said the board authorised the NEA to receive the new power sets after the Special Court’s verdict. The court had said the NEA could receive the transformers from the suppliers if any of them wanted to dispatch new power sets to replace the substandard ones supplied earlier.

Last November, Hu Bei had also sent 56 new transformers as a replacement after a probe committee set up by the NEA concluded that the supplied products were of inferior quality. Subsequently, JK Holdings had also dispatched 210 transformers sets.

NEA Managing Director Arjun Kumar Karki said the NEA will soon begin the process to receive the new transformer sets. He said a committee will be formed within a week to initiate the process.

After problems appeared in the equipment imported from China and Thailand in the last five years, the NEA in 2012 had formed an investigation committee to study the matter. The inferior transformers had resulted in higher power leakage, while a number of them turned dysfunctional. The committee led by then NEA board member Krishna Prashad Dulal had examined 4,657 transformers installed at several stations and sub-stations.

Meanwhile, the NEA has also has begun the process of purchasing new transformer sets through open bidding. The power utility also said it will repair all damaged power sets that are in its store.

Source : The Kathmandu Post