MCA-Nepal hits key milestones in transmission and road projects

I am happy to share that following the Entry Into Force (EIF) on 30 Aug 2023, MCA-Nepal has completed the procurement of some major contracts and made significant progress in preparing the sites for contractors’ access. This included ensuring work on land acquisition and forest clearance is achieved in adherence with the regulations of the Government of Nepal, MCC Environment Guidelines and International Finance Corporation (IFC) Performance Standard 5. I would like to highlight specific achievements and updates starting with the Electricity Transmission Project. 

One-year progress and updates 

MCA-Nepal awarded and signed contracts worth around $126m for the construction of three 400 kV GIS substations at three locations from May-July 2024 in Nawalparasi West, Nuwakot and Tanahun. Two substations, the New Damauli Substation and the Ratmate Substation will each have a capacity of 1,000 MVA, making them the largest substations in the country. 

Similarly, a two-year $1m Livelihood Restoration Program for 270 project-affected people in Ratmate Substation concluded on 30 May 2024 to pave the way for new businesses and prosperity. Project-affected people benefited from the program through training in high-value agriculture, a wide array of vocational skills, and job skills such as weaving, advanced computer training and financial literacy. MCA-Nepal had earlier acquired around 400 ropanis of land for the substation. 

The contractor for the 18-km cross-border transmission line segment has been selected and will be awarded within Aug 2024. Consultant Supervision Engineers are on board for supervision of construction works of transmission lines and substations and currently working to help MCA-Nepal re-launch procurement for the 297-km transmission line later this year. 

For the transmission line tower pads land acquisition, CDO-led Compensation Fixation Committees (CFC) have been formed to fix land rates for 856 tower pads across nine out of 10 districts. Rates for the lands to be acquired in Dhading, Makwanpur and Nawalparasi West have been fixed as of July 2024. MCA-Nepal has also completed the opening of bank accounts and provided financial literacy training for all persons receiving compensation, which are necessary precursors to making payments in these three districts. Similarly, the CFCs in six districts will be fixing the land rates for respective districts.  MCA-Nepal also plans to start and complete work in the remaining district of Kathmandu this fiscal year. 

Forest census works have been completed in nine out of 10 project-affected districts. MCA-Nepal is now doing the verification to apply for forest permits. Similar to land acquisition, MCA-Nepal plans to start and complete work in Kathmandu district this fiscal year. 

An important component of the Electricity Transmission Project is the Power Sector Technical Assistance. A contract worth $1.2m was signed on 22 July 2024 to provide advisory support in the economic/financial, technical, legal and policy/institutional regulatory work of the Electricity Regulatory Commission. The goal is to create an enabling environment of transparency, efficiency and competition in Nepal’s power sector.

Likewise, a contract worth $2.4m was signed on 15 July 2024 to provide consultancy services to enhance electricity use with a focus on preparing Municipal Energy Plans and developing capacities for productive use of electricity within affected wards under the MCA Partnership Program, a benefit-sharing activity under the Electricity Transmission Project.  

On the progress and updates on the Road Maintenance Project, the Initial Environmental Examination (IEE) Report for road maintenance works in the 40 km segment of the road from Dhan Khola to Lamahi along the East-West Highway has been approved. MCA-Nepal plans to launch the procurement of road maintenance works using Full Depth Reclamation (FDR) technology at the earliest this year. This segment will be maintained by applying new climate-smart technology of Full Depth Reclamation (FDR) and Superpave. 

Looking ahead, our goals for the second year are to sign the contract for the remaining 297 km of transmission line and move ahead in the construction of transmission lines and substations both, fix land rates in all affected districts and distribute compensation, and to move ahead with the road maintenance works with the selection of a contractor. We anticipate meeting these goals but we know that historically, in Nepal, working with communities that will be impacted by the project’s land acquisition can take time. We have been successfully navigating this and setting the bar in terms of handling this process fairly and plan to continue that going forward. 

The author is executive director at MCA-Nepal