The Nepal Electricity Authority (NEA) has appealed to Energy Minister Mahendra Bahadur Shahi to talk to Chinese Ambassador Yu Hong about the Chinese contractor for the hydro and electro mechanical works of the Kulekhani 3 Hydropower Project who has repeatedly missed the construction deadline. 

The Chinese company, Jheijian Jialin Company, has missed four completion deadlines, the latest of which had been set for July.

Frustrated by the interminable delays, project owner NEA requested the energy minister to take up the matter with higher authorities. 

“As the contractor has been working at a snail’s pace, the work does not look like being completed any time soon. Therefore, we had no option but to request the minister to take up the issue at higher level and put pressure on the Chinese contractor to expedite work,” said a highly placed NEA source. “The energy minster has agreed to talk to the ambassador about the issue.” 

Last Friday, a high level team led by Minister Shahi and including Energy Secretary Anup Kumar Upadhyay and NEA Managing Director Kulman Ghising visited the construction site and directed the contractor to work faster. 

“Although the contractor promised to do so, we are not in a position to believe it as it has made such promises several times in the past,” said the NEA source. “The commitment was never translated into action.”

The project’s civil contractor Sino Hydro has completed 98 percent of the construction, but there has been little progress on the electro mechanical front which includes installation of the turbines, water gate and transmission lines to evacuate the electricity generated by the plant.

The NEA is likely to grant a deadline extension to the civil contractor, but it won’t be able to do so for the hydro and electro mechanical contractor.

The NEA has fined Jheijian Jialin Rs80 million for delaying construction work, so there is no way it can extend the deadline. 

The state-owned power utility cannot terminate the contract with Jheijian Jialin as it will be difficult to find another hydro and electro mechanical contractor during this late phase of the construction.

The Chinese company has imported more than 80 percent of the equipment required for the project.

If the NEA hires another contractor, it will not take responsibility for the quality of the equipment imported by others.

The civil contractor and the hydro and electro mechanical contractor had agreed to complete the project by July-end during a meeting with the then energy minister Janardan Sharma on December 25. 

The project’s completion deadline has been extended four times since construction began in April 2008.

It was originally scheduled to be finished by 2012. When the project missed the deadline, it was extended by 30 months.

When that deadline too passed without the project nowhere near completion, the target was pushed back once again till the end of the fiscal year 2015-16.

The then prime minister Pushpa Kamal Dahal had also directed project officials to expedite the construction and complete it on time during his visit to the project site last December.

When NEA officials complained about the Chinese contractor’s apathy, he had said that the government would take up the matter with the Chinese government. 

But there was no change. The project has encountered cost overruns due to delays, and the developer has spent double the amount of money originally estimated.

The initial estimated cost of the project was Rs2.43 billion, but its cost has ballooned to Rs4.22 billion.