The Public Procurement Monitoring Office, acting on complaints from the Nepal Electricity Authority, has blacklisted the Chinese contractors assigned to execute the substation component of the Marshyangdi Corridor 220 kV Transmission Line Project and the Kathmandu Valley Smart Metering Project for noncompliance with the contract terms.

Shenzhen Farad Electric—the contractor appointed to design, supply, install and commission the Udipur and New Bharatpur substations under the $90 million transmission and substation projects funded with a concessional loan from the European Investment Bank—was blacklisted after it failed to appear and undertake the tasks.

“The contractor did not deposit the performance guarantee within 28 days of the announcement of its selection as per the procurement terms,” said project chief Chirantan Bikram Rana. “The project has seized around Rs1 million of the bid security amount previously posted by Shenzhen.”

The Marshyangdi Corridor project is a national priority project being implemented by the state-owned power utility.

According to the Project Management Directorate of the electricity authority, high voltage transmission lines in the corridor will evacuate around 1,600 megawatts produced by various hydropower projects located on the Marshyangdi River and its tributaries.

The Marshyangdi Corridor transmission lines are also part of the strategic Nepal Power System Expansion Project under the South Asia Subregional Economic Cooperation Power System Expansion Project, which has two major components.

The state-owned power utility is constructing a 220 kV power line from Manang to Chitwan and substations with differing capacities at four locations along the route.

The 112-km power line starts in Manang district and passes through the Annapurna Conservation Area to Khudi and Udipur in Lamjung district.

In June, the power utility accepted a Rs655 million bid from the Chinese contractor for the construction of substations at Lamjung and Chitwan with a deadline of one and a half years.

The utility has acquired 215 ropanis of land in Manang and Lamjung districts to build distribution substations.

After blacklisting the company, the power utility invited fresh bids for the substation component, deferring its plan to commission the power lines and supporting infrastructures by the fiscal year 2020-21.

The power utility has also fired Huizhou Zhongcheng Electric Technology assigned to execute the $8 million Kathmandu Valley Smart Metering Project, making it the third Chinese contractor undertaking a power project to be blacklisted this year.

“An investigation by the Asian Development Bank and power utility officials revealed that Huizhou had submitted fake documents during the bidding process to acquire the contract, which led to its disqualification and blacklisting,” said an anonymous official at the power utility.

After firing Huizhou, the project hired the second lowest bidder Pinggao-Wisdom joint venture which has quoted a price of Rs81.08 million to execute the installation of smart electricity meters.

The metering project envisages installing advanced metering infrastructure in the Kathmandu valley in the first phase with financial assistance from the Asian Development Bank.

According to the donor, installing smart meters will allow stakeholders to have a regular and accurate view of electricity consumption and ensure a more reliable supply of electricity, leading to reduced power cuts.

“The smart metering rollout programme is in its early stages and will be deployed in phases across the electricity distribution network of Nepal. It is envisaged to conduct six smart metering pilot projects in six distribution centres by September 2020, deploy 450,000 smart meters by May 2021, 3 million smart meters by May 2023, and 5 million smart meters in total by May 2025,” states a 2018 study by the donor.

According to the power utility, it plans to install the meters to modernise and automate the distribution network as part of its efforts to enhance its operational efficiency.

In May, the procurement office had also blacklisted Central China Power Grid International Economic & Trade for non-performance in the 220 kV Hetauda-Bardaghat-Bharatpur transmission line project.