Not being able to complete the assigned work on time, civil works contractor China Gezhouba Water and Power (Group) Company has tried to shrug off the responsibility for the delay in the construction of the Chameliya Hydropower Project.
The government had signed the contract with Gezhouba in December 2006, and it started the main civil work in January 2007. Four months ago, the project’s completion date was pushed back four years due to Gezhouba’s poor performance.
The run-of-the-river project was originally scheduled to be completed in 2011. The deadline was postponed to August 2013 and then extended again to March 2015 due to sluggish work by the Chinese contractor.
Now, Gezhouba has asked the government not to involve it in the dispute that has emerged with the electromechanical and hydro-mechanical contractor.
In a letter sent to the Nepal Electricity Authority (NEA), Gezhouba said it should not be blamed for the differences that have occurred between the NEA and KHNP Consortium, the electromechanical and hydro-mechanical contractor. The 30-MW Chameliya project is located in Darchula district in Far West Nepal.
KHNP Consortium, a Korean joint venture company which was contracted to carry out electromechanical and hydro-mechanical work and build a transmission line for the project, has demanded US$ 8 million from the government as compensation for cost and time overruns. The company said that though it had brought all the necessary equipment to the project site and waited for almost two years to start work, it has not been able to do so.
The Korean firm could not start work as China Gezhouba failed to complete the civil work on time. For this reason, the Korean contractor, which was supposed to complete its job in 2011, got an automatic contract extension from the government
until the end of 2013. The company was awarded the Rs 3.8 billion ($48 million) contract in April 2009.
The Chinese contractor China Gezhouba, for its part, blamed the government for the delay which has prevented the Korean firm from proceeding with its part of the project. Chameliya’s Project Chief Rajendra Manandhar said the Chinese contractor had written that the delay was due to the NEA’s fault.
“The contractor has stated reasons like adverse geological condition, delay in handing over of the project site, lack of access road, impediments created by locals and prolonged strikes and closures, among others, for the delay,” an NEA official said. “It has blamed the NEA for not addressing these issues on time which led to the delay in project’s construction.” The month-long banda called in May 2012 before the Constituent Assembly was dissolved also hampered work at the project, the contractor stated in its letter.
The official said that the Chinese firm expressed its concern over the issue following frequent news reports in the media which blamed Gezhouba for being at fault with regard to the NEA’s differences with the electromechanical and hydro-mechanical contractor. “It is an attempt to clarify its position by presenting itself as innocent and the NEA as guilty,” he said.
Before the project’s completion date was revised, a field study was conducted by the Economic Development and Cooperation Fund (EDCF), the South Korean aid agency that manages Exim Bank, which predicted that the project would miss its completion date. The EDCF also blamed the Chinese contractor’s poor performance for the delay stating that it was due to its “low priority, less profitability” attitude.
The total cost of the entire project is estimated at $ 99.9 million. The South Korean government under the Economic Development Cooperation Fund, a joint mechanism, extended $ 45 million in soft loans to Nepal to commission the project. Out of the total project cost of Rs 12.5 billion, Rs 8.6 billion has already been spent, according to the project.
Posted on: 2013-08-10 09:20