PAC directs NEA to stop work of Lower Solu until further notice

April 25, 2016 00:00 AM Republica

KATHMANDU, April 22: The Public Accounts Committee (PAC) of the parliament on Friday launched investigation into a decision to award the contract to build Solu Corridor Transmission Line Project, directing all concerned to stop project's work until further notice.

Before taking decision, PAC had held discussion in the case on Thursday and Friday, acting on a complaint filed by an individual.

PAC's decision comes nine months after the Commission for the Investigation of Abuse of Authority (CIAA) intervened into the project. It had delayed the project by eight months.

CIAA had written to the government to take departmental action against erstwhile energy minister Radha Gyawali, after finding her questionable intentions while awarding contract of the project to the second lowest bidder.

She was duly sacked from her post.

The project remained stalled until CIAA issued another directive, paving the way for Nepal Electricity Authority (NEA) to select the firm selected by Gyawali i.e. Mohan Energy Corporation. NEA took the decision accordingly on April 5.

NEA has also sought consent of Exim Bank of India. But it is yet to receive the Indian bank's response.

The project is a turn-key project being built utilizing the Indian Line of Credit.

As the project was about to move ahead, PAC directed authorities to stop the project's work, acting on a simple complaint filed against the agreement signed between NEA and Mohan Energy Corporation. Earlier, PAC had directed to stop work of Chamelia Hydropower Project after finding irregularities while making variation payment.

“PAC has decided to hold further discussion on the issue in the next meeting scheduled for April 27,” lawmaker Ram Hari Khatiwada told Republica. “We will look into only the renegotiations as informed by the energy minister on Thursday.”

Procurements of mega development projects often land in controversy. CIAA and parliament committees start probe into decisions related to projects based on simple complaints which cause unnecessary delay, inflicting huge loss on the project.

Chairman of Public Procurement Review Committee (PPRC) Shankar Pandey expresses dissatisfaction over disturbance in development works, saying that any controversy can be settled within 30 days of filing of complaints. “The preamble of Public Procurement Act 2007 clearly states that review of procurement decisions should be done by the committee,” said Pandey.

But dissatisfied parties in any procurement can get their voices heard without any liability by simply filing a complaint letter at CIAA or parliamentary panels. One needs to post a deposit of 0.5 percent of bid amount and put valid logic while filing complaint at PPRC.

Jaguar Overseas and BS Ltd, which is the second competitor in the project, has not filed any complaint at the committee. “Some lawyers of the second competitor had approached me to discuss about the project. I simply suggested them to apply at the committee. But they did not turn up,” added Pandey.  

As the complainants have to relinquish their deposit money if they lose the case, very few complaints are filed at the committee.

According to Pandey, they receive only about a dozen cases every year even though several of mega procurement decisions land in controversy. “Of late, courts have started referring procurement related cases to us,” Pandey said, adding: “It's very urgent to take a pragmatic approach for expediting project implementation and increase development spending.”

Delay in construction of 132 kV transmission line project, which connects Siraha with Solukhumbu, will be costly for NEA as it has to pay penalty to some five hydropower plants if the project is not ready by the time they start generation. NEA officials say the loss could be in tune of Rs 1.38 billion annually.

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