NEA revises Chameliya hydropower project cost

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    KATHMANDU, JUN 29 –

    ChameliyaNepal Electricity Authority (NEA) has decided to revise up the cost of the Chameliya Hydropower Project by Rs 2.4 billion, considering cost and time overruns.

    An NEA board meeting chaired by Energy Minister Radha Gyawali on Friday took a decision to this effect. With latest revision, the 30MW project’s cost has swelled to Rs 15.06 billion from Rs 12.66 billion.

    NEA said the estimated cost was increased after problems were identified in tunnel construction.  “The board has revised the cost of the project,” said Rajendra Kishore Kshatri, secretary at the Ministry of Energy.

    When the project was designed, its cost was estimated at Rs 8 billion. However, the cost was revised up to Rs 12.66 billion five months ago, citing the need for widening the tunnel.

    NEA board member Laxman Prasad Agrawal said more than 90 percent of work on mechanical hydro and over 60 percent of steering task has been completed.

    NEA’s decision to revise the project’s cost comes a week after an NEA board meeting decided to give Rs 1.9 billion to China Gezhouba Water and Power (Group) Company in variation claims. The Chinese company has been awarded the contract of the project’s main civil works.

    The construction, which started in mid-January 2008, was originally scheduled to be completed by mid-June 2011. But the completion date was pushed back by two years until mid-September, 2013 after delays in construction.

    After the project failed to complete the construction even within the extended time, the deadline was extended for the second time by one and half years.

    As per the latest schedule, the project has to be completed by the next nine months. However, NEA officials say it will take another one and half years to complete the project.

    The problems on the tunnel were identified two years ago. An Italian company, which studied technicalities of the tunnel, had recommended redesigning the tunnel. Of the 873m stretch of the tunnel which had narrowed, 470m has been widened.

    Friday’s meeting also decided to authorise the NEA board to sign power purchase agreement (PPA). “The NEA Act has stated the board should decide on the PPA,” said Agrawal. “We have decided as per legal provisions.”

    Earlier, the NEA managing director had the authority to sign PPA for projects below 25MW capacity. “The process of signing PPA was breached by the former managing director. The new decision is just a continuation of what we had been doing previously,” said Agrawal.

    Source : The Kathmandu Post