Financial and technical sides of the Augmentation of Upper Trishuli 3 A are sidelined

June 16, 2013, 5:45 p.m. Published in Magazine Issue: Vol: 07 No. -1 June 14- 2013 (Jestha 31, 2070)

Four former ministers Dr. Prakash Chandra Lohani (RPP), Dr. Ram Sharan Mahat and Dr. Prakash Sharan Mahat and Surendra Pandey CPN-UML) submitted a memorandum to chairman of the election council of ministers Khil Raj Regmi asking him to cancel the decision taken to augment Upper Trishuli 3 A from 60 MW to 90 MW.

CPN-UML leader Madhav Kumar Nepal asked the Commission for Investigation of Abuse of Authority to investigate the deal on Upper Trishuli 3 A Augmentation. Former finance secretary Rameshwor Khanal even blamed the Chinese for ignoring Nepal’s interests and promoting corruption in Nepal.  In his interview to Kantipur daily, Khanal accused the Chinese as working against Nepal’s interests in many areas, including augmenting of Upper Trishuli 3 A. Even politically affiliated trade unions of NEA are against it.

However, studies made by various experts since its inception showed that augmentation of Upper Trishuli 3 A project is technically viable and economically profitable to NEA and Nepal . At a time when present construction rate per MW of electricity is over 200 million rupees, the cost of the project is 120 million per MW experts argue.

“We have taken the decision looking at the broader interest of the country and NEA as this will save millions of rupees equivalent in foreign currency used to import energy and petroleum products. According to present forecast, there will be power cut even in summer. Generation of 30 MW in such a low cost will immensely benefit Nepal. I challenge those who are opposing the augmentation to prove it as financially and technically wrong,” said Rameshwor Yadav, Managing Director of NEA.  “The augmentation of the project is taken as per the provision of EPC agreement and Public Procurement Act and NEA Act and Regulations.”

Whatever the logic NEA managing director gives, critics want to cancel the deal.“This is not a time to debate economic and technical justification of Augmentation of Upper Trishuli 3 A project.  We are very much concerned on why NEA board suddenly took the decision to sign the augmentation with a Chinese construction company which failed to accomplish even 20 percent of the civil works. The augmentation of Upper Trishuli 3 A will delay the construction period and increased the price. There are rampant irregularities in the augmentation,” said former finance minister and CPN-UML leader Surendra Pandey submitting the memorandum to the chairman of council of ministers.

 After Arun III cancelation, this is another hydro power project in controversy, not for its technical and economic viability, but for unknown reasons. Opponents are attacking personally those who are involved in the deal rather than raising technical, legal and financial flaws creating confusion on the mind of the people.

 “The power generated by Upper Trishuli 3 A is much cheaper than what we have been getting from private developers.  There is the provision for augmentation in EPC contract.  NEA’s previous boards also set up committees to take up study on augmentation  of the project,” said managing director Yadav.

“The proposal for augmentation was even discussed during my tenure as a minister for water resources. But, I rejected  it,” said former energy minister Dr. Prakash Sharan Mahat.

Upper Trishuli-3 A Hydro-electric Project is under construction within a joint financial support by Nepal government, Nepal Electricity Authority (NEA) and Concessional loan from China Exim Bank. The contract agreement was signed between NEA and the contractor China Gezhouba Group Company Ltd for the construction of Civil Works, Electro Mechanical and Hydro-mechanical Works of the 60 MW installed capacity in 2010. Although the project needs to complete by May 31,2014, it was delayed due to various political obstructions, including bandhas. It has just made 21 percent progress in civil, electro mechanical and hydro mechanical side. So far as transmission line is concerned, the progress is just 2 percent.

Signed under the EPC model, the augmentation proposal was forwarded since the beginning of the work. “After augmentation of project to 90 MW, its power generation will be increased by 35 percent.  All the six technical committees formed since 2010 recommended augmentation of the project.”

This is not the only project that has landed in controversy.  Other China financed projects, Purchasing of Aircraft, Construction of Regional Airport in Pokhara, and Ring Road are also facing snags. Similarly, the proposal to construct West Seti by Chinese Companies is also opposed by major political parties. Interestingly, Nepalese communist are in the fore front of opposing Chinese investment.

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