Solu corridor transmission line project under investigation

Kathmandu, August 30

The Commission for the Investigation of Abuse of Authority (CIAA) — the anti-graft watchdog body — has started investigating the bid selection process of Solu Corridor 132KV Transmission Line Project. It has stated that there could have been irregularities committed by the bid evaluation committee of Nepal Electricity Authority (NEA).

The bid evaluation committee of NEA, formed under the convenorship of Project Chief Janardan Gautam, had selected New Delhi based Mohan Energy Cooperation Pvt Ltd — the second lowest bidder — on June 21 for the construction of the 90-kilometre Mirchaiya-Tingla 132 KV double circuit transmission line and substation of a similar capacity at Tingla in Solukhumbu district.

The bid evaluation committee proposed to extend letter of intent (LoI) to Mohan Energy on August 21 during NEA’s board meeting. However, two board members — Secretary of Energy Ministry Rajendra Kishore Kshatri and Santosh Narayan Shrestha — strongly opposed the decision of the bid evaluation committee. The issue was revealed after the CIAA recently seized the bid documents to probe the case.

According to CIAA officials, the cost of construction of the transmission line proposed by Mohan Energy is $2.62 million higher than the cost proposed by the lowest bidder — a joint venture of Jaguar Overseas and BS Ltd. Mohan Energy had proposed $22.97 million,whereas Jaguar Overseas and BS had proposed $20.35 million for the construction of the project.

NEA officials, however, argue that the bid evaluation committee selected the second lowest bidder based on the report of the management consultant. Lahmeyer International (India) — project management consultant — had disqualified the joint venture of Jaguar and BS citing numerous reasons like submission of the guarantee in Indian currency and low experience of the joint venture in installing transmission lines in hilly areas, among others.

Kanhaiya Manandhar, chief of NEA’s Directorate of Transmission Line, said that the bid evaluation committee selected Mohan Energy as it was considered the appropriate bidder to develop the project. But the reasons mentioned by Kanhaiya do not match with the report of the reevaluation committee formed by NEA managing director.

NEA had also formed a bid reevaluation committee after the lowest bidder was disqualified on the basis of the report of project management consultant and bid evaluation committee. NEA Managing Director Mukesh Raj Kafle, on July 14, had formed a reevaluation committee under the convenorship of Project Management Directorate Chief Surendra Rajbhandari comprising three members from NEA.

Submitting its report on August 8, the Rajbhandari-led committee had said that the reasons submitted for disqualification of Jaguar were not rational. Jaguar also has experience of working in Nepal. The company is currently developing the Kabeli-Damak 132 KV transmission line, which is being financed by the World Bank Group.

The Solu Corridor transmission line project is going to be developed with financial assistance from the line of credit (LoC) facility extended by the government of India and the project would be implemented in turnkey basis.

Since the project is being financed through the LoC facility of India, the bidder must be an Indian entity registered in India or established under any law in force in India having experience in construction and installation of high voltage transmission lines and substations for implementing the project.