Construction work on the stalled Upper Trishuli III A hydropower project is set to resume next week. 

The Nepal Army, which has been given the responsibility of repairing the project’s access road damaged by the 2015 Gorkha earthquake, is ready to start work.

“A unit of the Nepal Army which has been tasked to repair the access road is ready for deployment, and they will be at the site by next week,” said Phanindra Raj Joshi, project chief of Upper Trishuli III A. “The army will repair the 5-km road which links the project’s headworks.” 

Apart from reconstructing the 4-metre-wide road, the army will build protection 

on both sides of the dam which was also damaged by the landslide triggered by the earthquake.  

The 60 MW project was scheduled to be completed last year if the earthquake-triggered landslides had not damaged the project infrastructure and the access road that connects the project’s headworks and the powerhouse.

China Gezhouba Group Company (CGGC), the contractor for the hydroelectric project, had stopped work on the project after a crucial access road was damaged by the 2015 earthquake. 

Although the project contractor was supposed to build the access road, differences emerged over who should repair it. The dispute was settled after the consultant to the project and an independent team of experts submitted a report saying that the damaged access road should be rebuilt by the Nepal Electricity Authority (NEA), the owner of the project. 

A board meeting of the authority then requested the government to have the Nepal Army repair the damaged road. Subsequently, a Cabinet meeting held in the first week of January directed the army to repair the road. 

The contractor for the project, however, is still reluctant to resume work as the Export-Import (Exim) Bank of China, the lender to the project, is yet to extend the grace period for the repayment of loans granted to Nepal to construct the project. 

“Currently, the contractor is reluctant to resume work as it is seeking an assurance of payment for its job from the authority,” according to an NEA official. 

The Chinese bank has extended a concessional loan of $114.7 million at an annual interest rate of 1.75 percent for 25 years, with a grace period of five years. The grace period for repaying the loan expired in May 2016.

“It has been more than nine months since the government asked for an extension of the grace period, but it has not been approved yet,” said the NEA source. 

Top bank officials who were in Nepal in September had agreed to extend the grace period, but an official confirmation to yet to come.  

The Finance Ministry said the approval for the extension of the grace period would come very soon. 

“The bank has decided to award an extension, and currently it is in the process of getting the Chinese government’s approval,” said Baikuntha Aryal, joint secretary at the ministry. 

“I talked with Chinese Embassy officials in Kathmandu a few days ago, and they said the approval would come soon.”