After the Energy Ministry decided to cancel the consultant appointment process in a rejection of the choice of the Asian Development Bank (ADB), a key financer to the 140 MW project, its future has been uncertain.  The ADB had selected a joint venture between Germany’s Lahmeyer International and Canada’s Manitoba Hydro as the consultant, but the ministry wanted to award the contract to another bidder, Japan’s Kansai Electric Power Company, setting off a dispute which has threatened to sink the project.  

The PM directed Gyawali to sort out the problem during a meeting held at his residence in Baluwatar which was attended by Gyawali, Finance Minister Ram Sharan Mahat and NC Vice-President Ram Chandra Poudel.

Mahat said that the PM expressed concern over the project and directed Gyawali to expedite the process to resolve the issues. “She looked affirmative,” Mahat said, adding that the issue should be resolved soon. “The bid validity date will end on January 19, 2015. If the agreement isn’t signed before this, the cost might go up,” Mahat said.

According to sources, Gyawali is learnt to be consulting CPN-UML Chairman KP Oli regarding the issue. On Wednesday, the Ministry of Finance had written to the Energy Ministry asking it to rethink the decision.

According to Chiranjibi Nepal, the PM’s economic advisor, the Energy Ministry is more or less convinced about rethinking its decision. “Since the energy minister seems to be positive about going along with the ADB’s selection, there shouldn’t be any delay,” Nepal said.

The ADB along with the Japan International Cooperation Agency (JICA) and European Investment Bank (EIB) have pledged financing of around Rs 50 billion for the project. The Energy Ministry questioned the ADB’s choice claiming that a consultant having little experience in sedimentation flushing had been appointed. Sedimentation flushing is a process of removing clay deposits in the reservoir.

The ADB has been saying that the selection is based on holistic merits—the tendering process, construction supervision and operational maintenance which also includes the component of sedimentation flushing. A joint review committee formed of representatives from the ADB, Energy Ministry and Finance Ministry didn’t find any ground to question the ADB’ selection process.

Before the joint review committee’s decision was released, a study committee headed by the Energy Ministry’s Joint Secretary Keshav Dhowj Adhikari had concluded that the ADB’s selection was faulty for rejecting a company having better experience in sedimentation flushing.