An agreement was signed on Monday between Jagdulla Hydropower Company Limited, China's Jiangxi Construction Engineering (Group) Corporation Limited, and ANK Construction Nepal's JV.
What you should know
Jagdulla Hydropower Limited, a subsidiary of the Electricity Generation Company Limited (VUCL), has signed a contract agreement for the 106 MW Jagdulla Semi-Reservoir (PROR) Hydropower Project to be constructed in Dolpa.
The agreement was signed on Monday between Jagdulla Hydropower Company Limited, China's Jiangxi Construction Engineering (Group) Corporation Limited and ANK Construction Nepal JV.
The contract agreement was signed for Rs 13.73 billion including value-added tax (VAT) agreed by Jiangxi and ANK. The company has stated that the hydropower project should be constructed within the next 5 years with the agreement. Competitor Sino Hydro Corporation had offered Rs 15.7 billion including VAT.
When the contract was re-called on 6 Magh 081, Jiangxi, ANK and Sino Hydro were selected to open the financial proposal from among the applicants who applied through technical proposal evaluation. Against that, another applicant, Siu Infrastructure and High Himalaya Hydro Construction JV, had filed a writ seeking an interim order to stop the contract process. However, the contract process moved forward after the court did not issue an interim order.
The contract process for the project was completed in about 14 months. “The company that gets the contract should design and get approval within six months and proceed with the construction,” said Sanjay Sapkota, CEO of the company. The project is set to start generating electricity commercially on June 30, 2008. Sapkota said that even if the project is delayed by a day, there will be a loss of about Rs 13 million.
VUCL will own 26 percent of the project, Hydro Electricity Investment and Development Company Limited (HIDCL) 10 percent, Nepal Electricity Authority 9 percent, Karnali Provincial Government 5 percent, and Jagadulla and Mudkechula Rural Municipalities 1 percent each. The company has stated that 33 percent will be given to the general public, 10 percent to Dolpa residents affected by the project, and 3 percent each to residents affected by the transmission line and project employees.
Jagadulla and Mudkechula Municipalities will receive about Rs 80 million annually, the provincial government about Rs 160 million, and the federal government 320 million as royalties only after production. The annual income from the project is estimated to be about Rs 3.85 billion. The detailed engineering study of the project was carried out by NEA Engineering Company at a cost of about Rs 270 million.
The detailed study report (DPR) and environmental impact assessment (EIA) of the project have been approved. The company has stated that it has acquired 260 ropanis of land so far. The project will construct a 23-meter-high and 93-meter-long dam on the Jagdulla River in Hurikot, Jagdulla Rural Municipality-1. Electricity will be generated by pumping water from about 789 meters to the power house to be built in Mudkechula Rural Municipality-4 through a 6.1-kilometer tunnel
The total cost of Jagdulla is estimated at Rs 23 billion. The financial management has been done by investing Rs 4.4 billion in the project, Rs 4 billion from Nabil Bank, Rs 4 billion from the Employees Provident Fund, Rs 4 billion from Hydro Electricity Investment and Development Company Limited (HIDCL), Rs 2 billion from Laxmi Sunrise Bank and Rs 1.5 billion from Everest Bank.
The contract process that the company had called for under the Engineering, Procurement and Construction (EPC) under Civil and Hydromechanical on 20 Jestha 081 was cancelled on 22 Pus 081 after a dispute arose. Seven companies, including High Himalayan Hydro and AGE Company JV, Sharma and Zhongding International JV, Rail Bikas Nigam, Patel Engineering and Lama Construction JV, Ramechhap Sherpa Construction and Soma Enterprises JV, Sino Hydro, Om Infra and Fewa Construction JV, had applied for the contract. However, Jagdulla Company claimed that the contract was cancelled after none of the companies passed the technical proposal.
At that time, Energy Minister Deepak Khadka was accused of mediating in collusion by giving the contract to High Himalayan Hydro and AGE Company JV by excluding all the companies that had applied. The company that won the contract of 16 billion has reached the authority to pay 150 million each to four other companies at the rate of 1% each and 2% to the minister.
Then, on 6 Magh 081, the contract was called again. According to the company, Sino Hydro, Siu Infrastructure and High Himalaya Hydro Construction JV, Jiangxi ANK JV, Fewa Construction and TwoMG Insat Medinklak JV had applied. When the contract was called for the second time, Jagdulla Company had also revised some technical issues. The notice stated that it should have had a turnover of 34 million dollars in at least 3 years in the last 10 years.
Engineering, Procurement and Construction (EPC)/Plant should have had experience in working on at least one contract worth more than 40 million dollars in one design. Earlier, when the contract was called, it was mentioned that it should have had a turnover of 35 million dollars in at least 3 years in the last 10 years. It was stipulated that the experience of working on at least one contract worth more than $41 million in an Engineering, Procurement and Construction (EPC)/Plant design was required.
