The Nepal Electricity Authority (NEA) has extended the completion deadline of the Kulekhani 3 Hydropower Project for the fifth time to January 2018 as construction has been running late due to its slowpoke contractor.
Last week, a meeting of the board of directors of the state-owned power utility agreed to give Sino Hydro, the Chinese contractor for the civil works, six more months to complete the project.
The 14 MW cascade scheme was supposed to have been completed last July. Project owner NEA doubts the hydropower station will be able to start generating energy even by that date. Sino Hydro has been taking the rap for Jheijian Jialin Company, the hydro and electro mechanical contractor, which has been delaying the project and preventing the civil works contractor from finishing its task.
Although Sino Hydro has completed around 99 percent of the civil works, Jheijian Jialin Company has finished only 75 percent of its work.
Sino Hydro cannot complete the remaining 1 percent of the civil works until the electro and hydro mechanical works are completed.
The electro and hydro mechanical contractor, Jheijian Jialin Company, has been working at a snail’s pace and holding up civil works, forcing the NEA to extend the deadline.
“We are trying our best to speed up the performance of the contractor,” said Subash Mishra, the NEA appointed project chief of Kulekhani 3. As Jheijian Jialin has been fined Rs80 million for delaying construction, the NEA cannot extend its deadline nor fire it.
The contract cannot be terminated because it will be difficult to find another contractor at this late stage of construction. Also, the Chinese company has imported more than 80 percent of the equipment required for the project. If a new contractor is hired, it may not take responsibility for the quality of the equipment imported by the previous contractor.
“So, we will keep on pushing the contractor to complete the job on time,” said Mishra.
Recently, Energy Minister Mahendra Bahadur Shahi visited the project site and directed the slowpoke contractor to speed up the construction work. Likewise, NEA and Energy Ministry officials have repeatedly taken up the issue with the Chinese ambassador.
The project’s completion deadline has been extended four times since construction began in April 2008. It was originally scheduled to be completed by 2012. When the project missed the first deadline, it was extended by 30 months. When that deadline too passed, the target was pushed back till the end of the fiscal year 2015-16.
The then prime minister Pushpa Kamal Dahal had also directed project officials to expedite construction and complete the plant on time during his visit to the site last December.
When NEA officials complained about the Chinese contractor’s indifferent attitude, he had said the government would take up the matter with the Chinese government.
But there has been no change in performance. The project has witnessed cost overruns due to delays, and the developer has spent double the amount of money than originally estimated.
The initial estimated cost of the project was Rs2.43 billion, which has now ballooned to Rs4.22 billion. In May 2014, the National Planning Commission declared Kulekhani 3 a troubled project