KATHMANDU, Oct 4: Despite of two recommendations by Nepal Electricity Authority (NEA) not to upgrade the Upper Trishuli- 3A hydropower project, Secretary at the Ministry of Energy Hari Ram Koirala is lobbying for th third time to do just that.
Although most of the NEA board is reluctant to upgrade the project capacity, the secretary, who chairs the board, insisted on forming a committee to make recommendations on a report on the upgrading prepared by consultants.
“We repeatedtly asked the secretary not to opt for upgrading the project as almost 20 percent of the work has already been completed but he is moving ahead aggressively to effect the upgrade,” said one board member on condition of anonymity.
Contractor for the project China Gezhouba Group Co had requested the ministry to upgrade the project from the existing 60 MW to 90 MW, stating that it was technically feasible.
But board members and NEA staff were reluctant as work on the project has already commenced and the financing arrangements also completed. “It will bring unnecessary hurdles as additional funds have to be mobilised from China EXIM bank and there could be legal problems...it won´t be good for the country,” said a high level ministry source.
Upper Trishuli -3A lies between Sabrubeshi and Betrawati, 20 km north of Trishuli Bazaar. The Detailed Project Report for the project was carried out in 2007 and the tender offer completed in 2010. The estimated project cost is $125.78 million.
Repeated attempts were made to contact the secretary but he did not take the call. Sources said the secretary is in a mood to send the proposal to the cabinet for its endorsement if the NEA board opposes the upgrade.
The contractor has sought an increment of 1.5 times on the financing as the capacity would be increased 50 percent, but expert members on the board say it is not justifiable and there are possibilities of irregularities.
“Even with the upgrade we are not going to get an addition of more than 10 megawatts in winter when the power demand peaks, and there is adequate energy in summer. So there is no logic in investing so much more and derailing a project that is operating smoothly,” added a board member.
This project is being implemented under concessional loan from China Exim Bank and some funds from NEA and the government. The $115.7 million concessional loan from the Chinese bank comes at an interest of 1.75 per annum, and it is repayable over 25 years including a five-year grace period.
Interestingly, the members of the committee formed to review the technical report by consultants are non-experts. They include ex-managing director of Nepal Oil Corporation Digambar Jha, Tej Bahadur Bhatta, Deputy Director-General, Department of Water Supply and Sewerage, Surendra Raj Bhandari, Director, NEA, Gibacha Mandal, Senior Divisional Engineer at the Energy Ministry and Moti Bahadur Kunwar, Joint Secretary.
The committee has two weeks to come up with its recommendations.