KATHMANDU: The Public Account Committee of the Legislature-Parliament on Tuesday issued directives to Nepal Electricity Authority to scrap the contract for the 25-megawatt solar power system.

A meeting of the Committee today directed the Authority to cancel the contract, stating that the contract process itself was of mala fide intention.

The NEA, the national power utility, had decided to install solar system at Battar and Devighat of Nuwakot with the objective of developing a mixed power system in the country to end the load shedding.

A complaint was filed at the Committee arguing that the contract was given to an applicant who had proposed more cost for the construction of the project instead of giving it to the lowest among the five bidders.

The solar energy system is being constructed with the investment of the World Bank.

The Committee President Dor Prasad Upadhyay said, “The Committee has directed the NEA to cancel its decision of giving the responsibility of the project to the Pidgeon and Heron JV, and call for new tenders.”

The committee has called for scrapping all decisions and initiating a fresh tender process.

The committee meeting directed the government owned power monopoly to select the construction company through a new process by cancelling its earlier decision to this regard, citing the decision was found suspicious, controversial and illegal.

The NEA management was accused of financial irregularities in awarding the contract to the Raison Energy, which had bid Rs 680 million more than the lowest bidder Pidgeon and Heron JV. The latter had bid Rs 3.717 billion.

However, the NEA management has argued that the lowest bidding company was technically not sound according to the assessment carried out by an independent experts group.

However, Mukesh Raj Kafle, former executive director at NEA said that the Pingao and Heron JV itself was suitable.

Meanwhile, NEA Executive Director Kulman Ghising assured that he was ready to undergo and bear any sort of action if any kind of irregularities were proved in the bidding process for the construction of the solar power system.

But the lawmakers had opined that the contract should be awarded to the lowest bidder as per the Public Procurement Act and the existing financial provisions.

They further demanded action against the then Energy Minister and the NEA Executive Director who were involved in the decision process.

Some lawmakers proposed that the Commission for the Investigation of Abuse of Authority (CIAA) should be called in to investigate into the entire process, suspecting irregularities of millions of rupees in the tender process.

Lawmakers Ramhari Khatiwada, Bharat Shah, Dhanraj Gurung, Pashupati Chaulagain and Ananda Pokharel had suggested this in the meeting.

Similarly, lawmakers Meena Pun and Rupa Maharjan said that while taking action against NEA leadership may create negative impact as the leadership had played important role to reduce the power shortage.

The then executive director Kafle said that a decision was taken to contract a company which had proposed Rs 2.3 billion and after 10 months the decision was overturned and contacted to the next company which proposed over Rs 680 million more than the previous amount.

Lawmakers had objected on the decision saying that the latest decision was against the public procurement act.