Nepal | July 04, 2020

Contract termination delays construction of Tanahu hydro

THL plans to start work from January

Himalayan News Service
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Kathmandu, August 27

Following the contract termination with the Italian contractor Co-operativa Muratori e Cementisti (CMC) di Ravenna, the construction of the 140-megawatt Tanahu hydropower project, which is a capacity reservoir project being developed by Tanahu Hydropower Ltd (THL), will now begin in January.

Earlier, there were plans to start the construction of the project from the beginning of 2019. This change in schedule means that the starting time has been extended by one year.

THL had officially terminated the contract with CMC on March 6. Earlier, THL — a fully-owned subsidiary of Nepal Electricity Authority — had hired CMC to divert the flow of the river, build a dam and complete head works. CMC was selected as the preferred bidder as it had made the lowest bid of Rs 20.64 billion.

Pradip Kumar Thike, managing director of THL, informed that the construction has been delayed as the project had to terminate the initial agreement with CMC and issue another tender for the related works. “We have to follow the Public Procurement Act, which means that we have to abide by all the provisions of the act,” he stated. “Hence, we have set a target to start construction of the project from January next year.”

According to him, 19 companies had shown interest to build the aforementioned works. Among them, only four companies — China Gezhouba Group Company, Sinohydro Corporation Ltd, China National Electric Engineering Co and Song Da Corporation Vietnam/Kalika Construction JV — have submitted the technical and financial proposals for the project.

“We are now assessing the technical proposals of the four companies. After we finalise the detailed study of their technical proposals, we will forward them to the Asian Development Bank for its approval and only after that will we open the financial proposals,” he mentioned.

The second phase of construction, including tunnel construction, procurement of hydromechanical equipment, electromechanical equipment installation and other tasks, will be carried out by Sinohydro Corporation Ltd.

As per Thike, Sinohydro has already constructed the necessary infrastructure — office building, workers’ housing and roads. The Chinese firm has already finished its survey of the site and is about to finalise the design.

Likewise, the project has already assigned the responsibility to construct the 220 kVA double-circuit line from Damauli to Chitwan, which is the third phase of construction, to an Indian company called KEC International. The company is currently doing survey works of the transmission line.

The total cost of the project is estimated at $506 million, of which the Asian Development Bank will provide $150 million, Japan International Cooperation Agency will contribute $184 million, European Investment Bank will give $85 million and NEA will chip in $87 million. It is expected to be completed in the next five years.

The project has made 16.17 per cent physical and 12.33 per cent financial progress so far.

A version of this article appears in print on August 28, 2019 of The Himalayan Times.

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