Nepal | November 21, 2019

Parliamentary committee to issue verdict on Solu Corridor graft on April 27

Himalayan News Service

Kathmandu, April 22

The Parliamentary Committee on Public Accounts today said it would come up with a verdict on alleged misappropriation in handover of contract of Solu Transmission Corridor Project on April 27.

In the last three days, the parliamentary panel has grilled Energy Minister Top Bahadur Rayamajhi, Energy Secretary Suman Prasad Sharma, Managing Director of Nepal Electricity Authority (NEA), Mukesh Raj Kafle, former energy secretary Rajendra Kishore Kshatri and former NEA board member Santosh Narayan Shrestha, among others.

While officials like Kafle have said no malpractice occurred while handing over the contract, Kshatri today said he had never supported NEA’s board decision to extend the contract and had even written a note of dissent to express his dissatisfaction. Kshatri further said the decision to hand over the contract is likely to inflict losses of at least Rs 270 million on the state.

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 NEA, the state-owned power utility, using soft credit of $29 million extended by India.

The project landed in controversy after the 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 as ‘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.

Today, former NEA board member Shrestha said Mohan Energy had used fake experience certificate to bag the contract.

As per the eligibility criteria, a firm must have experience of building a 60-km transmission line in hilly area. “Mohan Energy had said it had built a similar project in Mozambique, but the certificate does not even mention the name of the institution that issued it,” said Shrestha.

Earlier, the Commission for the Investigation of Abuse of Authority (CIAA) had intervened in the matter after it received a complaint on misappropriation.  While probing the issue, the CIAA had found lapses in contractor selection process and had recommended action against different officials and the 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 issued a verdict on March 16 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.

Based on this court decision, NEA, on April 5, had handed over the contract of Solu Corridor Project to Mohan Energy.

A version of this article appears in print on April 23, 2016 of The Himalayan Times.

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