Zhejiang Hydropower bags two hydropower contracts worth $91 million
KATHMANDU, Jan 23: A Chinese private firm has bagged two major contracts to build hydropower plants in Nepal. This is the first time that a private Chinese firm has entered into the Nepali hydropower sector, according to government officials and the company which hired the firm.
Though China's government-owned contractors and construction companies are yet to leave their mark through in terms of work performance, they said the entry of private Chinese firm opens a new chapter in Nepali hydropower sector, they added.
Nyadi Hydropower Limited (NHL) has awarded civil, electro mechanical and hydro mechanical contracts worth US$ 39.5 million to build Nyadi Hydropower Project (30 MW) to Zhejiang Hydropower Construction & Installation Co. The Chinese firm has already bagged contracts worth $51 million for civil and hydro works of Kabeli 'A' Hydropower Project (37.6 MW) recently.
Butwal Power Company (BPC) is the promoter of both the companies.
Uttar Kumar Shrestha, CEO of BPC, said that the promoters decided to award the contracts to Zhejiang after assessing the latter's performance in Infra Co Asia, Vietnam.
Infra Co Asia also has also invested in Kabeli 'A'.
According to Shrestha, construction of both the projects will begin from February.
Gokarna R Pantha, deputy spokesperson of Ministry of Energy, said that this was the first time any private company has won hydropower contracts in Nepal.
Chameliya Hydropower Project and Upper Trishuli 3A, which is being developed by Chinese state-owned China Gezhouba Group Corporation (CGGC), have seen multiple time overruns.
Chameliya, which has already been delayed by five years, has seen nearly 100 percent cost overrun. The contractor has also been dragged into corruption controversy repeatedly. Similarly, China Gezhouba, which has bagged the engineering procurement construction (EPC) contract of Upper Trishuli 3A (60 MW), unsuccessfully tried to upgrade the project's capacity to 90 MW in 2013, flouting the contract document.
Similarly, the government had to terminate contract with China Railway 15 Bureau Group because of slow work progress in tunnel digging works of Melamchi Water Supply Project. Chinese contractors have also been blamed for the delay in building a substation of a transmission line at Dhalkebar as well as Kulekhani III Hydropower Project.
It can be hoped that satisfactory work performance of private companies from China will create good impression of Chinese companies in Nepal.
“Non-performing private companies cannot survive in China as there is fierce competition as well as close monitoring by the government,” said Mahesh Kumar Maskey, former ambassador Nepal to China, said. “It is difficult to answer why Chinese state-owned companies, who have developed mega projects worldwide, failed in Nepal,” he added.
“One needs to conduct a serious study and dig out logical reasons instead of putting blames and making superficial comments.”
Maskey also said that the northern neighbor would not linger on such petty issues. “We should focus on reaping more benefits from the bilateral relations as well as extend trilateral relations by including India,” Maskey added.
But two power plants -- Upper Marshyangdi 'A' (50 MW) and Upper Madi (25MW), which were developed by Chinese state-owned companies -- started generation this year without much delay. Sino Hydro Resources Ltd built Upper Marshyangdi 'A', while Upper Madi was built by China International Water & Electric Co (CWE).
CWE built the Three Gorges Dam that generates 22,500 MW of hydropower. A subsidiary of the same company is building Western Seti Project (750 MW).