NEA board bows down; rolls back disputed decision It still defends the move as ‘feasible’

KATHMANDU, JUN 13 -
Bowing down to intense pressure from all quarters, the Nepal Electricity Authority (NEA) board on Wednesday rolled back its controversial decision to upgrade the Upper Trishuli 3A Hydropower Project.

The NEA had on May 31 decided to upgrade the capacity of the project from 60 MW to 90 MW. However, the decision landed into controversy as it would have escalated the project cost by Rs 4 billion and delayed the construction by three more years. Further, the decision gave the contractor, China Gezhouba Group Co, which had completed only 30 percent of the construction work, a free run.

Since June 2, NEA employee unions have paralysed the NEA central office. They had threatened to cut off electricity supply to the official residence of Government Chairman Khil Raj Regmi on Friday if the decision was not taken back. According to sources, Regmi expressed concern about the furore in a meeting with Energy Minister Umakant Jha on Tuesday.

An NEA board meeting chaired by Minister Jha on Wednesday, however, still defended the decision, saying that the upgradation was feasible technically and financially. In what seemed as a move to cover up its ‘illegal and controversial’ decision, the NEA blamed the ‘irresponsible staff’ for the roll-back decision.

Had the upgradation been done, the project cost would have surged by $42.8 million. When the bid was called for the project, the Chinese contractor had quoted $89.18 million for 60 MW and $111 million for 90 MW. The government had then awarded the 60 MW project at $89 million. This time around, the NEA board decided to award the contract for 90 MW to the Chinese contractor for $132 million.

The contractor had been lobbying for the upgradation ever since it won the contract, but former Energy Ministers Prakash Saran Mahat, Gokarna Bista and Posta Bahadur Bogati had ignored its demand. The process started to move ahead during the Baburam Bhattarai government where Bhattarai himself was in charge of the energy ministry.On January 3, the Cabinet had, in principle, given its consent to the MoE for the capacity upgradation, neglecting suggestions made by two committees formed by the NEA to look into the issue. However, the NEA’s top management was still reluctant. But with the change in government, Energy Minister Jha, Energy Secretary Hari Ram Koirala and NEA Managing Director Rameshwor Yadav, all stood for the upgradation.

NEA employee unions on Wednesday said they would call off their protest from Friday, but would keep on pressing Energy Minister, Energy Secretary and NEA board members to resign. “We will let the NEA top officials to carry on with their work from Friday,” said NEA Employees’ Union Chairman Ram Prasad Rimal.

Though the decision has being cancelled, questions still remain over the construction of the project. The contractor has completed only 30 percent of the work in 25 months, while it should have completed 70 percent of the work by now. This has taken back the project by two years, during which electricity worth Rs 8 billion could have been generated.

It was still not clear whether the NEA will take action against the contractor for the delayed work.

Project Timeline

Feb 25, 2011: Cabinet approves Rs 7.08b loan from China Exim Bank

Nov 23, 2011: Foundation stone laid

June, 2012: MoE decides to increase capacity from 60 to 90 MW

July, 2012 : NEA committee says upgrading project inappropriate

Dec, 2012: MoE committee suggests both options-sticking to 60 MW plan or upgrading to 90 MW-are feasible

Dec 3, 2012: MoE sacks NEA board member Krishna Prasad Dulal, who had been opposing upgradation plan

Dec 14, 2012: MoE decides to forward to Cabinet a proposal to upgrade project

Jan 3, 2013: Cabinet decides, in principle, to upgrade capacity

Jan 7, 2013: Cabinet decision challenged in Supreme Court

Feb 3, 2013 : Court refuses to issue stay order, saying NEA board is yet to approve the Cabinet decision

May 31, 2013: NEA board finally decides to upgrade the project

June 2, 2013: NEA trade union launches protest programme

June 9, 2013: Decision challenged in Supreme Court again

Labels: National News