Tamakoshi Jal Vidhyut Company cancelled the bids for the construction of the 99.4 megawatt (MW) Tamakoshi V hydropower project after the price quoted by the shortlisted contractors came to be higher than the project’s estimated price.

China’s Sinohydro Corporation, which constructed the civil component of the Upper Tamakoshi, and China Gezhouba Group Corporation were the final shortlisted companies in the technical bids opened on February 28.

Two Chinese companies had been shortlisted to construct the civil component of the project.

Binod Bhandari, chief of Tamakoshi Jal Vidhyut Company, said that the price quoted by both companies was above the price estimated by the project.

“The financial proposal was cancelled because of the high cost,” he said, adding that, “with the cancellation of the proposal, we have reinvited new bids.”

Bhandari said the project work will be moved ahead and will be completed within the stipulated time.

The four-year project is estimated to cost Rs18.5 billion.

Tamakoshi V hydropower project in Dolakha is a wholly-owned subsidiary of the Nepal Electricity Authority (NEA).

The proposed project is a run-of-river hydroelectric plant designed to be operated as a lower structure of a cascade.

It does not need its own dam, because it takes its water directly from the tailrace tunnel of the 456MW Upper Tamakoshi Hydroelectric Project.

Civil works include the excavation of a headrace tunnel, a surge tank, a vertical shaft, a short pressure tunnel, an underground powerhouse and a spillway.

Hydromechanical works will comprise the design, manufacturing, installation, and commissioning of gates, penstock, valves, and gantry cranes.

The project implementing agency said that the groundwork is likely to begin at the end of the current fiscal year, or in mid-July.

The project is being constructed under the engineering, procurement and construction (EPC) model, according to Bhandari.

Under an EPC contract, a single contractor takes responsibility for all components like design, engineering, construction and procurement.

The contract binds the contractor to deliver the project by the stipulated time frame and at the predetermined price, regardless of any possible cost overruns.

The project implementing agency also said that bids for the electro-mechanical component would be invited in the second package.

The power produced from the project will be fed into the 220kV transmission line of the Upper Tamakoshi Project.

The underground powerhouse will be made at Suri Dobhan in Bigu Rural Municipality-3.

Currently, the project is building houses for employees of the project as well as the main offices.

Of the total investment, 30 percent will be through equity and 70 percent through a loan.

The project has already signed a memorandum of understanding with the Employees Provident Fund for an investment of Rs13 billion. It will take some time for the final agreement.

The Upper Tamakoshi project has proposed investing 10 percent in the project, while there will also be investment from the locals.