The Millennium Challenge Accounts Nepal has invited separate bids for commissioning the 400kV New Butwal Nepal-India Cross-border transmission line, with the Nepal Electricity Authority prioritising the construction of this section.

The 18 km-long Nepal section will be a part of the New Butwal-Gorakhpur Cross Border Transmission Line with the capacity to transmit as much as 3,500MW of electricity.

On Friday, the MCA-Nepal, the special purpose vehicle established to implement the projects under the MCC, invited bids and set the deadline for May 16.

With the construction of a transmission line on the Indian side underway, the MCA-Nepal decided to advance the 18-km Nepal portion with priority by separating it from the larger 315-km transmission line.

The office is yet to take a decision on the larger transmission section after the bids earlier invited were scrapped citing excessively high prices quoted by all the bidders compared to the estimated cost.

In October last year, the bidding process was scrapped after the MCA Nepal found that the lowest combined price quoted for the three packages by the bidders stood at $365.93 million, which accounted for nearly 66 percent more than the estimate, according to the details made available by MCA-Nepal.

Nepali officials believe the separation of the 18-km segment from the larger transmission line network will enable a quicker procurement process and its implementation in order to ensure that the line is completed on time—by May, 2026—to connect with the lines under construction on the Indian side of the border.

“We had pressured the MCA-Nepal to prioritise this section of power line given that work has already begun on the Indian side,” said Dirghayu Kumar Shrestha, chief of transmission directorate at the NEA. “We were telling the MCA-Nepal that construction should progress in Nepal to match that on the Indian side.”

According to him, the Indian section is expected to be completed by December 2025, and there should not be much delay in building the Nepal section of the cross-border power line.

Prime Minister Pushpa Kamal Dahal and his Indian counterpart Narendra Modi had virtually held a groundbreaking ceremony for the 400kV cross-border power line during Dahal’s Delhi visit from May 31 to June 3 last year.

Earlier, the NEA had even proposed to build the Nepal section of this cross border transmission line by itself anticipating that implementation of the project by the MCA-Nepal could be delayed. But later two entities agreed that MCA-Nepal itself would build it but the NEA’s concerns would be addressed, according to Shrestha.

After bids invited for constructing 315-km-long transmission lines in three lots were cancelled in October last year, the NEA again requested the MCA-Nepal to prioritise building the Nepal section of the power line.

Other sections include New Butwal-New Damauli (90km), New Damauli-Ratmate (90km), Ratmate-New Hetauda (58km), and Ratmate-Lapsephedi (59km).

NEA officials said the transmission line project is important to ensure the stability of power supply within the country and for its export to India.

The MCC is funding $500 million to build the transmission line and improve a part of East-West Highway. The Nepal government is also the financing partner, with a pledge of $197 million following the new budgetary commitment of $67 million last year.

Meanwhile, the MCA-Nepal has also advanced the process of constructing three 400kV substations for the transmission line after bids from six technically qualified firms were opened early this week.

Two Indian companies have quoted the lowest prices for three 400kV substations, according to the MCA-Nepal.