Kathmandu, October 13

Power commissioning from the Chameliya Hydroelectricity Project will take more than a year as the contractor has sought time extension till end of September 2017 to complete its civil works.

The recently held tripartite meeting among the officials of Nepal Electricity Authority, the contractor and the consultant of the project following the instruction of Energy Minister Janardan Sharma has scheduled completing the construction works by September of next year, according to Ajay Kumar Dahal, chief of the Chameliya Hydroelectricity Project.

As the civil works of the project will be completed only in a year’s time, it will take additional 70 days to complete hydro-mechanical and electro-mechanical works for the commercial operation of the project.

The project, which started in January of 2007, was supposed to be completed in May 2011. However, it has already been five years since the initial deadline expired and the project is yet to start commissioning power, causing a loss of around Rs two billion in revenue every year to Nepal Electricity Authority (NEA).

Construction works of Chameliya Hydroelectricity Project was halted since July 2014 due to the dispute in the variation order sought by the contractor, China Gezhouba Group Corporation (CGGC) to open 843-metre tunnel squeezed by mudslides. Works of the project have been resumed since September 28 this year after the Ministry of Energy allowed the NEA to release provisional payment for the disputed issues like the variation cost and unsettled payments till the time the issues were finalised.

Minister for Energy Sharma had instructed the CGGC to complete the civil works within this fiscal year, that is, by mid-July 2017. But the contractor has sought extension till September-end of 2017 to conclude the works. Now, NEA has scheduled project completion deadline to 2017-end and has said that no further extension will be granted for completion of the project. In this regard, the contractor has made commitment to accelerate the works after festive season to ensure the tunnel widening works are completed as early as possible.

The contractor, consultant and NEA have also agreed to meet every month to resolve any issues hindering construction works and also report to the NEA and MoE regarding the progress every week.

It is reported that 97 per cent of the civil works of the 30-megawatt hydropower project located in far-western development region has already been completed. The contractor had halted all works as the NEA failed to release the funds sought by the contracting party after the Public Accounts Committee of the Legislature-Parliament barred NEA from releasing payment doubting irregularities.

The variation order sought by the contractor is almost double the amount estimated for the construction of four-km tunnel worth Rs 920 million. The contractor had sought additional Rs 1.9 billion (cost variation) after a length of 843 metres of the tunnel had constricted.

NEA has been bearing a huge loss not only in terms of revenue but also due to increase in foreign exchange rate owing to the project construction delays. Nepali currency has depreciated heavily vis-à-vis the US dollar from Rs 72 in 2007 to Rs 107 at present. Roughly per megawatt cost of the Chameliya Hydroelectricity Project will be above 500 million (including the cost of road connectivity to the project area, local electrification and transmission line), according to analysts.