The Nepal Electricity Authority (NEA) is to build five substations at various locations in the Kathmandu Valley in a bid to improve power distribution. Towards this end, the state-owned power utility has selected two Chinese companies to award the construction contracts.

Pinggao Group Co has been chosen to build 132 kV substations at Mulpani, Phutung and Chapagaon. Likewise, Sinosteel Company has been picked to erect 220 kV substations at Lapsiphedi and Changu Narayan. The NEA said it settled on the companies after evaluating their technical and financial proposals.

“We have already invited the Chinese companies for negotiations before signing the contract,” said Manoj Silwal, chief of the Project Management Directorate at the NEA. “We will be holding talks with the potential contractors this month.”

The Public Procurement Act requires state-owned enterprises to conduct negotiations with the selected contractors before signing the contract. The NEA plans to start construction of the five subsidiary stations by the end of February 2018. “The contractors will be given 30 months to complete the task,” said Silwal.  

Meanwhile, the NEA has been evaluating technical proposals to select a contractor for the construction of a 220 kV substation at Barhabise.

The six substations are being constructed as part of the Power Transmission and Distribution Efficiency Enhancement Project (PTDEEP) being executed by the Nepal government in association with the Asian Development Bank (ADB).

The new substations, according to the NEA, will significantly increase the load capacity of the electricity distribution system in the Valley.

Apart from building half a dozen new substations, the $180 million project expects to meet the growing energy demand of the Valley and increase the capacity and reliability of distribution networks by undergrounding and automating the networks and using insulated cables for overhead lines.

The NEA has already called for tenders for the installation of underground power cables in the northern and central parts of Kathmandu served by its Maharajgunj and Ratna Park distribution centres. “Currently, we are evaluating the technical proposals of the bidders, and it will take some time for the selection,” said Silwal.  The major reason behind removing the existing overhead lines and installing an underground system is to increase the reliability of the distribution system besides increasing the capacity, according to the NEA.

The power utility’s existing distribution system is very weak which results in abrupt power cuts even when there is adequate supply. The Valley’s existing distribution network can’t support a load of more than 400 MW. The NEA is planning to upgrade it to be able to support up to 2,000 MW.