Tanahu Hydropower Limited, the developer of a 140-megawatt scheme in Damauli, is gearing up to invite the second bid in a year for the construction of a major component, including a dam and other structures.

This has come after one of the project financer Asian Development Bank rejected contractors selected by the developer in the second bidding process last month.

“We are preparing tender documents and plan to open fresh bids by January upon approval from ADB” said Sachen Gautam, communication expert of Tanahu Hydropower Limited.

This will be the third time the project would be inviting global bids to execute an important component of the $550-million plant located in central Nepal, hurting the prospects of the storage project going online in the stipulated deadline of 2024.

According to Gautam, the project deadline will have to be rescheduled as the preliminary processes linger on.

The developer, a wholly-owned subsidiary of Nepal Electricity Authority, had terminated the contract for the construction package with the Italian builder, Cooperativa Muratori e Cementisti di Ravenna (CMC) after the Italian party refused to comply with construction dates giver by the developer.

After Tanahu Hydropower terminated the contract with CMC, the latter moved an Italian court which has halted the release of Rs2 billion in bank guarantee agreement from Italy’s Intesa Sanpaolo Bank to Nepal Investment Bank.

Nepal Investment Bank, sandwiched in the payment row, had backed CMC with the guarantee amount, acting on assurance from Intesa. The bank has already released the funds to Tanahu Hydropower, but it has yet to receive the funds from Intesa and has appeared at the Italian court for a decision review.

According to an official close to the development, authorities are mulling to rope in second lot contractor Sinohydro to build the cofferdam to avoid serious time and cost overruns caused by delayed and repetitive bidding for the contract.

Chinese developer Sinohydro is carrying out works pertaining to tunnel and powerhouse construction, procurement of hydro-mechanical and electro-mechanical equipment and has constructed project office, worker’s quarters and a portion of the access road to the plant site.

Under the tender for the delayed first package, the construction contractor is supposed to construct a 140-meter high dam, a cofferdam, two river diversion tunnels and other structures.

Funds from donor agencies, Asian Development Bank and European Investment Bank will be mobilised to carry out the first package of works, project developers said.

The $550-million project is being built with credit facility extended by the Asian Development Bank ($150 million), Japan International Cooperation Agency ($184 million), European Investment Bank ($85 million) and investment amounting to $87 million from the electricity authority and government.

The Tanahu Hydropower Project is projected to generate 587.7 gigawatt hours of electricity in the first 10 years of operation. The project can generate energy for six hours daily during the dry season.

The plant will evacuate power through a 40-km long 220 kV double circuit transmission line to New Bharatpur sub-station. And, under the third package of the project, Indian contractor KEC International has begun check survey of the 200kV double circuit transmission line extending from district headquarters Damauli to Bharatpur in Chitwan.