Kathmandu, March 4

The contractor of the Chameliya Hydropower Project—China Gezhouba Group Corporation (CGGC)—has reopened the tunnel that had caved in by mudslides.

The works of reopening 843-metre section of the tunnel that had caved in started on September 28 last year and was completed today, according to Energy Secretary Anup Kumar Upadhyay. Along with this, civil works of the Chameliya project has been completed and after completing some hydro mechanical works, the project will start commissioning power.

It is expected to take additional 70 days to complete hydro-mechanical and electro-mechanical works for the commercial operation of the project.

Located in Darchula of far-western region, the 30-megawatt Chameliya Hydropower Project took seven years longer than the initial deadline for completion.

This has been causing revenue loss of around Rs two billion 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 CGGC to open the 843-metre tunnel that had caved in due to the mudslides. The works of the project finally resumed in September last year after the Ministry of Energy allowed the NEA to release the payment.

Minister for Energy Janardan Sharma had instructed CGGC to complete the civil works within this fiscal year, that is, by mid-July, 2017. But the contractor has sought two additional months to conclude the works.

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 accelerated the works and the project is expected to commission power by September-end this year.

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 Rs 500 million (including the cost of road connectivity to the project area, local electrification and transmission line), according to analysts.