The Nepal Electricity Authority (NEA) has started implementing the 25 MW solar plant project in Nuwakot following a court order allowing it to move ahead.

The proposed scheme had remained in limbo after the deal signed with the Chinese contractor was suspended by order of the parliamentary Public Accounts Committee (PAC). Subsequently, the Patan High Court directed the Energy Ministry not to implement the House panel’s decision, and the contract signed between the NEA and Risen Energy Company was reinstated. “It has been some weeks since the Chinese contractor resumed work at the construction site,” said Kulman Ghising, managing director at the state-owned power utility. “If everything goes as planned, the installation will be completed and the solar plant will start generating electricity within a year.”

The World Bank-funded project suffered a four-month hiatus after the parliamentary committee in August directed the ministry and the NEA to scrap the contract signed with the Chinese company and restart the procurement process to appoint a new contractor. The House committee issued the instruction stating that the procurement process, which led to the appointment of Raijin Energy, violated several provisions in the Public Procurement Act. The committee’s order led to the suspension of the contract and the Chinese contractor went to court.

The World Bank, which has extended a $37 million loan to implement the solar project, was unhappy with the parliamentary committee’s decision and hinted it might drop the project. However, following the court decision, there is little chance of that happening.

In February 2015, the World Bank agreed to provide $130 million to the government to build solar stations to supply electricity in the Kathmandu Valley and reduce electricity leakage. Out of that amount, $37 million was earmarked for the installation of solar plants at Devighat and Trishuli in Nuwakot district.

Although work on the solar plant should have begun within a year of signing the aid agreement, the NEA took around two years to award the contract as the entire contractor selection process was dragged into controversy.

Disagreements arose after former NEA managing director Mukesh Raj Kafle unilaterally decided to hire a Chinese company to build the project. This company was later deemed ‘technically unqualified’ by a committee comprising international experts.

Based on this decision, newly appointed NEA Managing Director Kulman Ghising decided to award the project to Raijin Energy, but the parliamentary committee invalidated the decision after receiving a complaint that the price of Rs3.7 billion quoted by Raijin was Rs680 million higher than the cost proposed by the contractor favoured by Kafle.