NEA mulling ways to hire contractor

The power utility is prepared to call for global tenders if the Cabinet rejects its plan to hire a contractor without competition

Nov 7, 2017-The Nepal Electricity Authority (NEA) has been mulling ways to hire a contractor to complete the stalled Dhalkebar substation since firing the original contractor, Central Power Grid International Economic and Trade Corporation of China, over delays.

The state-owned power utility is considering two options: Call for global tenders or appoint a contractor without competition after getting the government’s go-ahead. The NEA favours selecting a contractor outright as this will be much faster, and the project can be finished in the time it will take to process global tenders, it said.

“If the construction work is carried out swiftly, the project can be completed within three months. It will take around three months just to appoint a contractor if it is done through a global tender,” said a highly placed NEA source. “Therefore, we will request the Energy Ministry to submit the proposal to appoint a contractor without competition to the Cabinet.”

The Dhalkebar substation is of strategic importance, so the government should allow the NEA to appoint a contractor through negotiations, the source added. The 220 kV substation will allow the NEA to boost electricity imports from India over the Dhalkebar-Muzaffarpur cross-border transmission line, and prevent possible power cuts during the dry season.

The power utility is prepared to call for global tenders if the Cabinet rejects its plan to hire a contractor without competition.

Last September, the NEA fired the Chinese contractor which has completed more than 90 percent of the construction work on the substation after being fed up with deliberate delays.

Central Power Grid International Economic and Trade Corporation has procured almost all the equipment needed for the substation. Officials said it might be difficult to find a new contractor as it would not be able to guarantee the quality of the equipment brought by its predecessor.

As per the deal signed between the NEA and the Chinese company in June 2014, the substation should have been up and running by September 2015. However, deliberate delays by the contractor led to the deadline being extended for the third time to May 31, 2017, but that deadline too passed after it halted construction without notification.

Former energy minister Mahendra Bahadur Shahi then extended the deadline to October, and directed the Chinese company to complete construction by that date, which led to work being speeded up and most of the goals being achieved.

However, the Chinese company started exhibiting defiance after the NEA terminated its contract for the Bharatpur-Bardaghat 220 kV Transmission Line Project signed almost seven years ago.

The contractor was originally supposed to complete the transmission line project in December 2013. However, after it failed to finish the project even after the deadline had been extended for the third time till June 2017, the NEA scrapped the deal. Since then, the contractor has been repeatedly halting work on the Dhalkebar substation to express its displeasure.

Source: The Kathmandu Post