Delay in construction of transmission lines by NEA leads to losses for everyone

Kathmandu

Despite long hours of power cuts even in wet season, electricity generated by two cascade projects — 4.34 MW Tungun Thosne and 2 MW Khani Khola hydropower project is wasted due to lack of connection to the grid. Nepal Electricity Authority (NEA) has not been able to construct the Matatirtha-Malta 33 kV transmission line project due to problems with contractors. Khani Khola Hydropower Public Limited (KKHPL) — developer of these projects, is forced to bear a loss of Rs 730,368 per day. And electricity that would be sufficient to fulfill the demand for a district is wasted.

This is just one example, there are many such projects whose construction is almost in the final stage but transmission line projects to connect them to the national grid are far behind. According to Independent Power Producers’Association of Nepal (IPPAN), IPPs have projects totaling at least 100 MW capacity to be completed in this fiscal 2016-17. Due to delays in transmission line projects, projects close to completion seems that they will also face the same fate.

Lacking Connection

Developers are suffering a significant loss as the produced power cannot be evacuated to the national grid. On the other hand, NEA has to pay a penalty to the developers as per the Power Purchase Agreement (PPA). Moreover, the country suffers prolonged power cuts even after projects being completed.

“We have invested Rs 1.10 billion to construct these projects and now when they have been completed, there is no transmission line to evacuate generated power,” said Bijay Man Sherchan, Chairman of KKHPL. Citing that there is a clause to get five per cent penalty in PPA, he said, “The penalty that the NEA pays is not even sufficient for paying back our interest rate. If this is the situation, developers will not invest in the hydropower sector.”

Informing that no work at all has been carried out for the 33 kV transmission line so far, Sherchan said, “NEA awarded the project work to contractor Tripureshwor Jaya Durge who has 10 different similar projects. They have not been able to complete a single project.” He further said that NEA’s lack of proper monitoring, keeping contractors in the loop and holding them responsible for completion of projects on time has resulted in costly delays. According to him, no work on transmission tower erection has been done till now.

Poor performance

As a contingency plan, NEA plans to evacuate power through the 11 kV transmission line for the project. However, even that will take time. “As per NEA, they will take 45 days more to complete this 11 kV transmission line, and till then we have no option but to wait and watch,” he said in disappointment. He stated that there is sufficient funds to developdomestic hydropower projects but the government needs to be more responsible.

“A total of at least 100 MW projects will be completed in this fiscal. If NEA cannot complete the transmission line projects on time, NEA has to pay a huge penalty as per the PPA to developers,” said Kumar Pandey, General Secretary of IPPAN. He said, “Developers initiate their projects only when the government commits to complete their part of the project on time. Not fulfilling these commitment shows how irresponsible NEA is. This is not acceptable from a public entity.” He said that developers suffer the most as they invest huge capital acquiring loans. According to him, developers of projects totaling 700 MW are waiting for the commitment of NEA to construct transmission lines before starting.

All talk

Stakeholders stated that problems of land acquisition, right of way issues, forestry clearance, snail paced bureaucratic process, contradictory policies, irresponsible contractors and time consuming process are to blame for delayed transmission line projects. “In the case of the Matatirtha-Malta transmission line project, we have already completed the substation but we are facing difficulties in erecting towers due to contractors,” said Kanhaiya Manandhar, Chief of Directorate of Transmission Line at NEA. Hewa Khola 15 MW project and Upper Marsyandi 50 MW project are near to

completion. He said, “We have a contingency plan for Hewa Khola project which will be completed on time to evacuate power. We have almost completed Bhulbhule transmission line to connect Upper Marsyandi project.”

Manandhar informed that the government has made good ground policy to develop transmission line projects in the concept paper ‘National Energy Crisis Mitigation and Electricity Development Decade 2072’. “On the basis of this paper, the government has formed the ‘Infrastructure Development Projects Monitoring and Direction High Level Committee’. This committee will solve the issues related to important development projects,” he informed.

He further said that they are working on a master plan to have cross border connectivity with India. “We have solved the issues of right-of-way and forestry for the 220 kV Khimti-Dhalkebar (75 km) transmission line project via fast track system. Other pending transmission line projects such as Hetauda-Syuchatar and Kusma have also been solved,” he

explained. According to him, they have plans to complete 500 km transmission line projects by the end of this fiscal year.

Big plans

While Manandhar is optimistic about the smooth work environment at these projects, developers stated that it is not the actual situation and there are challenges to implementation.

In Dordi Corridor alone, 112 MW total power projects are under construction and their commercial operation date (COD) is within three years. But the interesting thing is that NEA is still working on the initial environmental examination (IEE) of the project.

If this transmission line is not completed on time, Upper Dorje I 25 MW and Upper Dorje 27 MW will not be able to evacuate energy to the national grid and NEA will have to pay the penalty to developers.

The Upper Marsyandi project has COD in few months. However, the 220 kV Marsyandi Corridor Transmission Line Project still waits for approval from the Ministry of Energy (MoE) for terms of reference (ToR). “We have completed the survey design and initiated the Environment Impact Assessment for the project to be fast tracked,” said Chirantan Rana, Project Manager at Marsyandi Corridor 220 kV Transmission Line Project. He informed that they broke the license

into two sections, the Manang-Udipur (46 km) and Udipur-Bharatpur (69 km).

Agreeing that they are behind schedule, he said, “As soon as we get approval for ToR, we will take out the tender of IEE for the project. Our target was to complete the project in 2019 but it seems it will be completed only in 2020.” The 115 km long transmission line project will have the capacity to evacuate 1,600 MW from Ilam to Bharatpur. According to him, the total project cost of USD 95 million will be funded by the European Investment Bank.

Pretty on paper

On the National Energy Crisis Mitigation plan, Rana said, “It is a brilliant document that addresses hurdles of transmission line development such as right-of-way issues, forestry clearance, local obstruction, land acquisition,

et cetera. However, the main challenges emerge in the implementation part.” He further said, “If only the government can turn the concept paper into directives and act, only then it can be implemented smoothly.”

Likewise, in the Solu Corridor total 217.5 MW projects are in the construction phase, however, the 132 kV transmission line project is still waiting for forestry clearance. Solu (23.5 MW) and Lower Solu (82 MW) are already in construction. “It seems that Solu will be completed four months before the completion of the transmission project in 2018,” said Janardhan Gautam, Project Manager at Solu Corridor 132 kV Transmission Line Project, adding that they are working on the project to be completed on time. He emphasises on the need to select technical and competent bidders rather than just the lowest bidder. “A year was wasted on the issue of selecting more technical bidders than the lowest bidder. Everyone should be aware of this,” he said.