A committee formed to advice on capacity upgradation of the 60MW Upper Trishuli 3A Hydropower Project has concluded that it would be inappropriate to increase the project’s capacity to 90MW under current circumstances.
The committee formed by the Nepal Electricity Authority (NEA) said the project’s upgradation would create confusion and even pose threat to its successful completion.
The six-member committee led by NEA Director Subash Dahal submitted its report to the Ministry of Energy a week ago.
Despite strong reservations from the Finance Ministry, the Energy Ministry had been pushing for the plan.
According to the report, the upgradation increases cost and time and creates legal- and contract-related complexities. Also, new technical design review, detail project report, environmental impact assessment are required to be carried out, besides arranging additional funds, the report says.
“An additional $44.59 million is required for which the government has to either amend the concessional loan agreement with the Chinese government or manage itself,” reads the report. “And, NEA has to again acquire the generation licence.”
The government awarded the project contract to Chinese contractor China Gezhouba Group Company (CGGC) in May 2010. CGGC began construction in June, 2011, and has so far completed 20 percent work.
According to the report, as the project is funded with concessional loans from the Chinese government, it is necessary to take Chinese Exim Bank’s consent for the project’s upgradation. “If the capacity has to be increased to 90 MW, Exim Bank’s approval is required,” the report says.
The government has signed Rs 7.05 billion loan agreement with the Chinese Exim Bank for the project.
“As the project’s capacity was mentioned 60 MW while calling tender, we cannot deny the possibility of other bidders complaining about partial treatment, if the capacity is revised to 90MW,” reads the report.
The report also revealed that CGGC has been asking the government to increase the project’s capacity, even before the pre-award negotiation stages. CGGC had asked NEA to upgrade the project on December 14, 2009, for the first time, the report said. “Since then, the contractor has been frequently sending letters to NEA, asking for the projects capacity enhancement,” said a high-level NEA official.
The report has recommended formation of a high-level committee comprising experts if the project has to be upgraded. “It would be better to conduct a detailed study before taking a decision,” reads the report.
Energy Secretary Hari Ram Koirala refused to comment on the report and said the ministry would take a decision after thoroughly going through the report.
Source : The Kathmandu Post