The Parliamentary Committee on Public Accounts today said it would come up with a verdict on alleged misappropriation in handover of contract of Solu Transmission Corridor Project on April 27.
In the last three days, the parliamentary panel has grilled Energy Minister Top Bahadur Rayamajhi, Energy Secretary Suman Prasad Sharma, Managing Director of Nepal Electricity Authority (NEA), Mukesh Raj Kafle, former energy secretary Rajendra Kishore Kshatri and former NEA board member Santosh Narayan Shrestha, among others.
While officials like Kafle have said no malpractice occurred while handing over the contract, Kshatri today said he had never supported NEA’s board decision to extend the contract and had even written a note of dissent to express his dissatisfaction. Kshatri further said the decision to hand over the contract is likely to inflict losses of at least Rs 270 million on the state.
Solu Corridor is a 90-km transmission line project, which extends from Mirchaiya of Siraha to Tingla of Solukhumbhu. The 132 kV double-circuit transmission line is being built by NEA, the state-owned power utility, using soft credit of $29 million extended by India.
The project landed in controversy after the bid evaluation committee formed by NEA disqualified one of the eight bidders — joint venture between Jaguar Overseas Ltd and BS Ltd of India — from taking part in the bidding.
The joint venture, which according to documents was the lowest bidder, was not allowed to take part in the competition as ‘it had issued bank guarantee in Indian currency, as against US dollars or Nepali rupee’.
Other reasons cited for disqualification were: extension of power of attorney to BS Ltd without fulfilling all the requirements, failure to clearly define roles and responsibilities of partner firms, and inability to submit appropriate certificate on joint venture’s work experience in hilly area.
Citing these reasons, the bid evaluation committee had selected Mohan Energy Corporation Pvt Ltd of India as the preferred bidder, as it had pledged to build the project at $23.08 million — the lowest price among seven remaining bidders. The joint venture between Jaguar and BS is said to have quoted at least Rs 270 million less than Mohan Energy to build the project.
Today, former NEA board member Shrestha said Mohan Energy had used fake experience certificate to bag the contract.
As per the eligibility criteria, a firm must have experience of building a 60-km transmission line in hilly area. “Mohan Energy had said it had built a similar project in Mozambique, but the certificate does not even mention the name of the institution that issued it,” said Shrestha.
Earlier, the Commission for the Investigation of Abuse of Authority (CIAA) had intervened in the matter after it received a complaint on misappropriation. While probing the issue, the CIAA had found lapses in contractor selection process and had recommended action against different officials and the then energy minister Radha Kumari Gyawali.
This was the main reason why the previous government led by late Sushil Koirala had sacked Gyawali.
Gyawali later moved the Supreme Court (SC), which issued a verdict on March 16 saying ‘the CIAA’s recommendation for action was not legitimate’. The apex court is yet to come up with the full text of the verdict.
Based on this court decision, NEA, on April 5, had handed over the contract of Solu Corridor Project to Mohan Energy.
Source : The Himalayan Times.
PAC directs NEA to stop work of Lower Solu until further notice
Before taking decision, PAC had held discussion in the case on Thursday and Friday, acting on a complaint filed by an individual.
CIAA had written to the government to take departmental action against erstwhile energy minister Radha Gyawali, after finding her questionable intentions while awarding contract of the project to the second lowest bidder.
She was duly sacked from her post.
The project remained stalled until CIAA issued another directive, paving the way for Nepal Electricity Authority (NEA) to select the firm selected by Gyawali i.e. Mohan Energy Corporation. NEA took the decision accordingly on April 5.
NEA has also sought consent of Exim Bank of India. But it is yet to receive the Indian bank’s response.
The project is a turn-key project being built utilizing the Indian Line of Credit.
As the project was about to move ahead, PAC directed authorities to stop the project’s work, acting on a simple complaint filed against the agreement signed between NEA and Mohan Energy Corporation. Earlier, PAC had directed to stop work of Chamelia Hydropower Project after finding irregularities while making variation payment.
“PAC has decided to hold further discussion on the issue in the next meeting scheduled for April 27,” lawmaker Ram Hari Khatiwada told Republica. “We will look into only the renegotiations as informed by the energy minister on Thursday.”
Procurements of mega development projects often land in controversy. CIAA and parliament committees start probe into decisions related to projects based on simple complaints which cause unnecessary delay, inflicting huge loss on the project.
Chairman of Public Procurement Review Committee (PPRC) Shankar Pandey expresses dissatisfaction over disturbance in development works, saying that any controversy can be settled within 30 days of filing of complaints. “The preamble of Public Procurement Act 2007 clearly states that review of procurement decisions should be done by the committee,” said Pandey.
But dissatisfied parties in any procurement can get their voices heard without any liability by simply filing a complaint letter at CIAA or parliamentary panels. One needs to post a deposit of 0.5 percent of bid amount and put valid logic while filing complaint at PPRC.
Jaguar Overseas and BS Ltd, which is the second competitor in the project, has not filed any complaint at the committee. “Some lawyers of the second competitor had approached me to discuss about the project. I simply suggested them to apply at the committee. But they did not turn up,” added Pandey.
As the complainants have to relinquish their deposit money if they lose the case, very few complaints are filed at the committee.
According to Pandey, they receive only about a dozen cases every year even though several of mega procurement decisions land in controversy. “Of late, courts have started referring procurement related cases to us,” Pandey said, adding: “It’s very urgent to take a pragmatic approach for expediting project implementation and increase development spending.”
Delay in construction of 132 kV transmission line project, which connects Siraha with Solukhumbu, will be costly for NEA as it has to pay penalty to some five hydropower plants if the project is not ready by the time they start generation. NEA officials say the loss could be in tune of Rs 1.38 billion annually.
