MCA Nepal cancels all transmission line bids

The Millennium Challenge Corporation (MCA) Nepal has announced the cancellation of all the bids that it had received for the construction of a 315-kilometer transmission line.

Assistant Communication Specialist with MCA Nepal, Pushkar Mathema, informed that all the tenders for the transmission lines have been revoked.

MCA Nepal had initiated a global tender in December of the previous year for the design, supply, installation, testing, and commissioning of transmission lines. After studying technical proposals of six bidders, it shortlisted five Indian companies—Kalpataru Power Transmission, Transrail Lighting Ltd, Tata Projects Ltd, KEC International, and L&T Ltd.

MCA Nepal officials said the tender process was canceled as the quoted costs were up to 65 percent higher than the original estimate. “We will now go for a fresh round of bidding,” Mathema added.

MCA Nepal had invited bids for the 315-kilometer Lapsiphedi-Butwal 400 kV Transmission Line by dividing it into three segments: Lapsiphedi-Ratamate-Hetauda, Ratamate-New Damauli, and New Damauli-New Butwal.

The MCC project officially commenced implementation on Aug 30 after nearly one and a half years of preparatory work. It must complete all the projects within five years. Failure to meet the five-year deadline allows the Millennium Challenge Corporation (MCC) to withdraw the project.

However, MCA Nepal has not completed even the preparatory works, including land acquisition, in some areas and tree felling activities.

MCA Nepal has already initiated a $100m bidding process for the construction of 400 kV substations at Ratamate in Nuwakot, Damauli in Tanahun, and Bhumahi in Nawalparasi. The land required for the Ratamate substation has already been acquired, and the process of land acquisition for the transmission line is underway, according to MCA Nepal.

Additionally, the project is in the process of inviting tenders for tree felling for the substation and the right of way for the transmission line. Correspondence and coordination with the Ministry of Forest and Environment are ongoing to secure tree felling approval, it added. The ministry has already assigned the relevant divisional forest offices to conduct tree counting.

Once the tree counting is completed, approval will be sought from the Council of Ministers for tree felling. Furthermore, discussions are underway with the ministry to determine the methodology for tree plantation as compensation for the felled trees.

The construction of the 400 KV transmission line will require the erection of 856 towers. As per the Environmental Impact Assessment (IEA) report, the project will need to fell approximately 202,200 trees across 354 hectares. MCA Nepal has expressed its commitment to planting one tree for every tree felled. However, the ministry has proposed to plant 10 trees for every tree felled or provide equivalent compensation. 

MCA Nepal and its consultants are currently engaging in consultations with local residents before conducting a detailed tree count. It hopes to get the actual details of the number of trees to be planted after the count.

Nepal was selected for the MCC Compact in Dec 2014, while the formal agreement was signed in Sept 2017. The compact was ratified by the parliament on 27 Feb 2022.