Kathmandu, September 22

Works to open up the tunnel of Chameliya Hydroelectricity Project, which had been slightly constricted due to mudslides, will resume by the end of this month. The process to open up the tunnel had been halted since July, 2014, due to the dispute in the variation order sought by the contractor, China Gezhouba Group Corporation (CGGC), causing delay in project completion.

During a tripartite meeting between the contractor, employer and consultant of the project held at the Ministry of Energy (MoE) under the supervision of Energy Minister Janardan Sharma, the CGGC has made a commitment to resume work within this week. The latter has also agreed to finalise project completion schedule within a week.

Likewise, the government has made a commitment to make provisional payment for the disputed issues like the variation cost and unsettled payments till the time the issues have been finalised.

However, Minister Sharma instructed the concerned stakeholders of the project, who were present at the meeting, to conclude the project within this fiscal. “We cannot be flexible in project completion deadline,” he said, adding, “Now the concerned parties should stick to the project completion deadline of mid-July next year.”

A commitment paper among the contractor, employer and consultant was signed today after the minister’s instruction to accelerate the project woks.

Li Ping, project manager of CGGC; Ajay Kumar Dahal, chief of Chameliya Hydroelectricity Project and Sanjeev Shah on behalf of Shah Consult, Silt and Icon Co-signed the paper in the presence of Energy Secretary Anup Kumar Upadhyay, Managing Director of Nepal Electricity Authority (NEA) Kulman Ghising and General Manager of CGGC Zho Xianzhong.

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

It is quite strange that Minister Sharma has dealt with the issue today as the energy minister because works of the project were stalled when Sharma, as chairman of the Public Accounts Committee of the Legislature-Parliament, had instructed the MoE and NEA to halt the payment processes after the variation order was approved by NEA board led by then energy minister Radha Gyawali in July 2014.

The contractor had, thus, subsequently halted all works as the NEA failed to release the funds sought by the contracting party. The variation order sought by the contractor is almost double the amount estimated for the four-km tunnel construction worth Rs 920 million. The contractor sought additional Rs 1.9 billion (cost variation) after a length of 843 metres of the tunnel had constricted.

According to Sanjeev Shah, consultant of the project, treatment works on 232 metres of the tunnel had been carried out prior to the works being halted. It will take around four months to restore 611 metres of the tunnel. Another three months will be required to concretise the adit tunnels that are used to enter the main tunnel. Similarly, another month will be required to fill the tunnel with water and three months to test the turbine. This basically means that the project will require at least 11 months to start commissioning power commercially.

Around 97 per cent of the civil works of the 30 megawatt hydropower project located in far-western development region has already been completed. The project, which started in January 2007, was supposed to be completed in May 2011. However, it has already been five years since the deadline and the project is yet to start commissioning power causing a loss of around Rs two billion in revenue every year to NEA.

NEA has been bearing a huge loss not only in terms of revenue but also due to increase in foreign exchange rate. Nepali currency has depreciated heavily vis-à-vis the US dollar from Rs 72 in 2007 to Rs 107 at present.