The Tanahu Hydroelectric Project has missed its initial deadline to appoint a contractor as one of its financiers, the Asian Development Bank (ADB), delayed evaluating the technical proposals of potential builders.

Tanahu Hydro Limited (THL), a wholly-owned subsidiary of the Nepal Electricity Authority (NEA) and the developer of the 140 MW reservoir project, had planned to hire a contractor by December 2017. With the deadline passed, it is now planning to do so by March 2018.

Last July, THL had forwarded the technical proposals submitted by three companies vying to get the contract for the first package which includes formulation of a detailed design of the project and construction of the headworks to the ADB for its examination.

However, the multilateral lender is yet to complete the evaluation of the proposals. “Such delays by the ADB have already pushed back the implementation of the project,” said the source at the THL. “It will take around three to four months to mobilise the contractor after it is selected. Therefore, even if the ADB selects the contractor now, we can mobilise it only by March.”

In a meeting with the Manila-based multilateral lender around a month ago, NEA Managing Director and THL Chairman Kul Man Ghising had requested the ADB for an early completion of the bid evaluation. “But we are yet to hear positive news from them,” said the source.

Meanwhile, THL is all set to hire a contractor for the construction of the second package of the project which includes construction of waterways and a powerhouse at the project site.

The project office has evaluated both technical and financial proposals of the two contractors vying for the job and forwarded them to the financier, the Japan International Cooperation Agency (Jica), for its okay. THL will enter into an agreement with the selected company after getting the no objection letter from Jica.

So far, the project developer has almost completed pre-construction works like construction of the access road to the powerhouse and a camp for project officials and the consultant. It has also provided compensation to over 80 percent of the landowners whose properties were taken over by the project.

The Tanahu Hydroelectric Project, located 150 km west of Kathmandu on the Seti River, will be one of the biggest reservoir type projects in the country with an estimated annual energy generation capacity of 587.7 GWh in the first 10 years of operation. The project can generate energy for six hours daily during the dry season. It is being built using credit facility extended jointly by the ADB, Jica and European Investment Bank (EIB).