Dhalkebar Substation Project Power imports may be hit by project delays

Dhalkebar Substation Project Power imports may be hit by project delays



Jul 24, 2017-

The Nepal Electricity Authority’s (NEA) plan to increase energy imports during the dry season may be hit due to delays in the construction of a substation at Dhalkebar by Central Power Grid International Economic and Trade Corporation. The Chinese contractor has stopped work at the Dhalkebar Substation Project for a week without giving a written explanation. As per the deal signed between the NEA and the Chinese company in June 2014, the substation should have been up and running by September 2015. 

The deadline had been extended for the third time till May 31, 2017, but still the project remains incomplete. The NEA had been mulling to extend the deadline to October 2017 when the contractor abruptly stopped work, according to the state-owned power utility. The Chinese company started exhibiting defiance after the NEA terminated its contract for the Bharatpur-Bardaghat 220 kV Transmission Line Project signed almost seven years ago. 

The contractor was originally supposed to complete the project in December 2013. However, after it failed to finish the project even after the deadline had been extended for the third time till June 2017, the NEA scrapped the deal. “The Chinese contractor had asked us to make a price adjustment, but there is no such provision in the contract. Hence, we were forced to terminate it,” said Kulman Ghising, managing director of the NEA. “The contractor has stopped work on the Dhalkebar substation to use it as a bargaining chip.”    

If the substation at Dhalkebar is not completed immediately, it will be difficult to keep the country load-shedding free during the upcoming dry season, according to Ghising. Nepal’s electricity demand is expected to increase by around 200 MW then. 

Even though domestic generation will increase by around 130 MW, output is expected to drop by a third during the rainless months. The 220 kV substation at Dhalkebar will allow the country to import another 100 MW of power. Currently, 160 MW is being imported from from India through the Dhalkebar-Muzaffarpur cross-border transmission line. “The Chinese contractor is well aware of this fact, and it is trying to give us a hard time,” said Ghising. “If we fire the Chinese company and hire another contractor, it will push back the completion date further.”  

According to the NEA chief, these are not the only projects that have been hit by slowpoke contractors. “There are numerous other projects,” he said. “Quoting extremely low prices while bidding for the contract and then asking for price escalation and making endless claims by delaying construction has been the general tendency of contractors in our country.” Another example of a project wallowing in the doldrums due to a slowpoke contractor is Kulekhani 3. Jheijian Jialin Company, the Chinese contractor for the hydro and electro mechanical works, has finished installing only 50 percent of the plant and machinery. The 14 MW hydropower project has been in construction since 2008, and it is sure to miss its July completion deadline even after four extensions.