The Nepal Electricity Authority (NEA) is redoing the public procurement process to appoint contractors to install underground power cables in Kathmandu after previous bidders quoted a much higher price than the estimate.

The state-owned power utility wants to move all power cables underground in the northern and southern parts of the Kathmandu Valley to improve distribution. The NEA has invited two separate global tenders from interested firms to replace the overhead cables in areas served by the Ratna Park and Maharajgunj distribution centres.

The scheme to replace the cables is part of a project funded by the Nepal government and the Asian Development Bank (ADB) which seeks to meet the growing energy demand in the Valley, and increase the capacity and reliability of the distribution networks by undergrounding and automating the networks, using insulated cables for overhead lines and using smart meters.

This is the NEA’s second attempt to hire contractors after its earlier bidding process launched more than a year ago was scrapped because the price quotes were too high. The financier ADB had pressed the NEA to go ahead with the hiring process even though the lowest bid was higher than the estimated cost, but the power utility cancelled the process and started anew.

According to the bid notice issued by the NEA, international competitive bidding will be conducted in accordance with the ADB’s ‘single stage two-envelope bidding procedure’ under which interested parties have to submit the technical and financial bids in two envelopes. The technical bids will be opened first while the financial bids will remain sealed and unopened in a locked box. The financial bids of only the technically qualified bidders will then be opened, and the one bidding the lowest price will get the contract.

Manoj Silwal, chief of the Project Management Directorate at the NEA, told the Post that the power utility was planning to complete the procurement process and appoint the contractor by March 2019. The winning contractor needs to complete the project within two and half years.

According to Silwal, the project will use a horizontal erection gridding system to lay underground cables as this will cause less damage to the roads. This system allows power lines to be laid over a distance of 100 metres by drilling a pit at one place. The power utility has clearly said that vehicular traffic will not be disturbed by its work as it will immediately blacktop the road after the cables are laid.

The major reason behind the plan to remove overhead lines and install underground cables is to increase the reliability of the distribution system, according to the NEA. The power utility’s existing distribution system is very fragile, resulting in abrupt power cuts despite adequate supply. The Valley’s existing distribution network can’t support a load of more than 400 MW. The NEA is planning to upgrade the system to support a power load of up to 2,000 MW.