Nepal | October 17, 2019

Panel begins hearing on irregularity

Solu Transmission Corridor Project

Himalayan News Service

Kathmandu, April 19
Parliamentary Committee on Public Accounts today started hearing on alleged misappropriation in handover of contract of Solu Transmission Corridor Project, which, according to the panel, could have inflicted losses of at least Rs 270 million to the state.

The Commission for the Investigation of Abuse of Authority (CIAA) had previously launched an investigation into this matter. After probing the issue, the CIAA had recommended action against various officials, including then energy minister Radha Kumari Gyawali.

This was the main reason why the previous government led by late Sushil Koirala had sacked Gyawali.
Gyawali later moved the Supreme Court (SC), which on March 16 issued a verdict saying ‘the CIAA’s recommendation for action was not legitimate’. The apex court is yet to come up with the full text of the verdict.

“The SC may have ruled in favour of Gyawali because the new constitution — which was promulgated in September — does not allow the CIAA to take such actions. But when she was accused of wrongdoing, the old constitution was in force. And the old constitution allowed the CIAA to make recommendations for actions,” said former minister and Nepali Congress lawmaker Minendra Rijal. “So, the latest SC verdict does not necessarily mean Gyawali is innocent.”

Other lawmakers, such as Jagdish Narsingh KC, Sarvendra Nath Shukla, Ramhari Khatiwada, Bikash Lamsal and Jay Dev Joshi, also spoke along the same line and demanded investigation into the matter.
“Our intention isn’t to stall national projects of strategic importance. But we can’t remain mute spectators when corruption of Rs 270 million is taking place,” said Khatiwada.

Solu Corridor is a 90-km transmission line project, which extends from Mirchaiya of Siraha to Tingla of Solukhumbhu. The 132 kV double-circuit transmission line is being built by Nepal Electricity Authority (NEA), the state-owned power utility, using soft credit of $29 million extended by India.

The project landed in controversy after bid evaluation committee formed by NEA disqualified one of the eight bidders — joint venture between Jaguar Overseas Ltd and BS Ltd of India — from taking part in the bidding.

The joint venture, which, according to documents, was the lowest bidder, was not allowed to take part in the competition citing it had issued bank guarantee in Indian currency, as against US dollars or Nepali rupee.

Other reasons cited for disqualification were: extension of power of attorney to BS Ltd without fulfilling all the requirements, failure to clearly define roles and responsibilities of partner firms, and inability to submit appropriate certificate on joint venture’s work experience in hilly area.

Citing these reasons, the bid evaluation committee had selected Mohan Energy Corporation Pvt Ltd of India as the preferred bidder, as it had pledged to build the project at $23.08 million — the lowest price among seven remaining bidders. The joint venture between Jaguar and BS is said to have quoted at least Rs 270 million less than Mohan Energy to build the project.

But since the Jaguar-BS joint venture was disqualified, NEA, on April 5, handed over the contract of Solu Corridor Project to Mohan Energy.

“We had to hand over the contract because the transmission line project is of strategic importance. If we fail to build this project on time, 215 megawatts of electricity, which various projects on the corridor will generate in the next three years, will go to waste. If this happens, we will have to recompense Rs 1.38 billion to private power developers per year,” NEA Managing Director Mukesh Raj Kafle told the parliamentary committee.

However, lawmakers said investigation must be launched to find out the reason behind disqualification of Jaguar-BS joint venture from the bidding competition.

Madhav Gadtaula, joint secretary at the Energy Ministry, urged the parliamentary committee to issue a clear-cut verdict as soon as possible so that development works are not stalled.

“We won’t be able to perform our works properly if different bodies of the state issue different decisions,” he said.


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