Tanahu Hydropower Ltd (THL) And Song Da Corporation, Vietnam-Kalika Construction (P) Ltd, Nepal (JV) has signed a contract agreement for the construction of package one of Headworks of Tanahu Hydropower Project.

Pradeep Kumar Thike, Managing Director of THL, and representative of the JV Bikram Pandey signed the agreement. The amount of the contract agreement is Rs.16. 62 billion excluding VAT.

The package one agreement of 140 MW Tanahu Hydropower includes diversion of the river and construction of the dam. As per the agreement, the contractor company has to complete the construction work within 57 months of signing the agreement.

MD Thike said that the construction work will complete within 57 months of the execution of the agreement.

Tanahu Hydropower Limited — the developer of the Tanahu Hydropower Project — has terminated the contract signed with Cooperativa Muratori e Cementisti di Ravenna (CMC), the Italian contractor appointed to execute one of the components of the power plant.

Tanahu Hydropower Limited — the developer of Tanahu Hydropower Project — has terminated the contract signed with Cooperativa Muratori e Cementisti di Ravenna on 1 October 2018.

THL published the first tender notice on 25 April 2019. Following the evaluation, all the tenders were canceled and the re-tender was republished on 28 February 2020.

After the upsurge of COVID-19 Pandemic's subsequent announcement of lockdowns and restriction on international flights, the date for tender extended several times.

Finally, technical evaluation of three international tenders, two were asked to submit financial proposals. Out of two, Song Da Corporation, Vietnam-Kalika Construction (P) Ltd, and Nepal JV) awarded the contract on the basis of the lowest bidder.

The construction work under package two has been currently undergoing. This package includes tunnels, construction of powerhouse and supply of hydro-mechanical and electro-mechanical equipment.

The contractor company Syno Hydro has already been completed the construction of the Cable Tunnel and currently, it is working on an under-ground powerhouse, a tunnel for search tank access and an access tunnel to the dam site.

Under the third package, the construction work of 220 kV double circuits Damauli Bharatpur Transmission line is underway.

Tanahu Hydropower Limited, the wholly-owned subsidiary of Nepal Electricity Authority (NEA), the state-owned power utility in October selected CMC to execute an important component of the $550 million plants located in central Nepal.

Although Sinohydro Corporation, the Chinese contractor hired to execute the hydro-mechanical and electro-mechanical works under the second package of the project has already mobilized the workforce at the project site, the construction of the entire project will be affected as the tasks of the two contractors are interrelated.

The Tanahu Hydropower Project will be one of the biggest reservoir-type projects in the country, with an estimated annual energy generation capacity of 587.7-gigawatt-hours in the first 10 years of operation.

The project can generate energy for six hours daily during the dry season. Tanahu Hydropower is developing the project using a credit facility extended jointly by the Asian Development Bank, Japan International Cooperation Agency and European Investment Bank. The project is estimated to cost $550 million.