KATHMANDU, July 24: Completing the Dhalkebar substation to import more power and bringing the Kulekhani III plant into generation are two major tasks planned by Nepal Electricity Authority for continuous energy supply in the coming dry season. But inaction by Chinese contractor is emerging as a stumbling block.
China's government-owned Central Power Grid International Economic and Trade Corporation has also threatened to terminate the contract for the substation at the eleventh hour if its demands are not met, including a shutdown for power bypass via underground in order to install additional superstructures.
NEA had scheduled a power shutdown on Saturday but the contractor demobilized its staff on Thursday, said Radhe Sharan Mahato, NEA project manager for Dhalkebar Substation.
Work on the substation has already missed two recent deadlines -- December 2016 and May-end-- affecting NEA's plans to import an additional 100 MW from India in the dry months and synchronize cross-border transmission lines with the Indians.
The remaining work might only take two months and NEA officials were expecting to meet the new deadline of August. But the contractor's threat to walk out of the project has created confusion among the NEA leadership.
But there is another story associated with the threat. NEA officials have taken the contractor's threat as a bargaining chip against the seizure of a bank guarantee of about Rs 180 million after the termination of another contract, for the Bharatpur Bardaghat transmission line, in early June.
Mahato also informed that he received an SMS from contractor company general manager Geng saying they won't start work until the sized bank guarantee is returned. But this is not mentioned in official correspondence.
The contractor had also demanded price escalation over the 2010 contract though there is no such provision in the contract.
An analysis of the item-wise prices quoted by contractors shows that they tend to bid low overall to win the contract but quote higher prices for the goods to be supplied. They receive all payments for the goods immediate after delivery and make a hefty profit.
Later, they show reluctance to carry out the construction work such as putting in the foundations, erecting towers and laying out cables, as these activities are not as profitable because of the low tender bidding.
“Therefore they seek to get an exit from the remaining financially unattractive tasks,” said the source, suggesting that the procurement guidelines of the World Bank should be revised.
Talking to Republica, NEA Managing Director Kulman Ghising said they had no other way but to terminate the contract. “We did not want to terminate for we had to get the work done but there was no other way,” said Ghising.
Meanwhile, Chinese contractor Zhejiang Jialin has also halted electro-mechanical and hydro-mechanical work at Kulekhani III, which is expected to start generation by October, because local sub-contractor Golchha Organization has not mobilized the needed manpower. “The main problem is the contractor does not mobilize the manpower needed to complete the task,” added Ghising.
NEA was planning to import an additional 100 MW, up from the current 160 MW, through the Dhalkebar- Mujaffarpur Transmission Line after completion of the substation. It had also aimed to add 14 MW from Kulekhani III, which operates full capacity during dry-month peak hours.