Print Edition - 2018-12-01 | MONEY
Nepal, China to review status of joint projects
Dec 1, 2018-
The Nepal-China joint oversight mechanism is scheduled to meet in Kathmandu next week to review the status of bilateral and joint venture projects including undertakings in which Chinese companies are involved.
Officials of the two countries will sit down to address bottlenecks as Chinese involvement in Nepal’s infrastructural development is expanding, and the number of projects has swelled immensely.
The two sides will identify key problems facing the projects and address them after reviewing their status.
Foreign Secretary Shankar Das Bairagi will lead the Nepali side while Chinese Ambassador to Nepal Yu Hong will lead the Chinese delegation at the meeting in which government and project officials under various ministries will be participating.
The two countries formed a joint oversight mechanism to resolve issues and expedite the projects being developed with Chinese involvement after several of them failed to make the expected progress. The decision to form the mechanism was taken during Prime Minister KP Sharma Oli’s visit to China in June.
According to Energy Ministry officials participating in the meeting, the Kulekhani-3 Hydropower Project being executed by two Chinese contractors tops the agenda. Although Sino Hydro, the Chinese company contracted to implement the civil works of the project, has almost completed the task, Jheijian Jialin, another Chinese contractor hired to implement the electromechanical works, has not been working satisfactorily to move the 14 MW project forward.
The Nepal Electricity Authority (NEA), the owner of the project, has tried every means possible to make Jheijian Jialin speed up the pace of work, including imposing a fine of Rs80 million for delaying construction.
But the company’s performance didn’t improve, leaving the state-owned power utility in a difficult position.
The NEA can’t fire the contractor as it will be difficult to find another one to implement the electromechanical works when construction is in the final stages of completion. The project’s completion deadline has been extended four times since it launched in April 2008. “We will ask our Chinese counterpart to resolve this issue,” said Dinesh Kumar Ghimire, spokesperson for the Energy Ministry.
Another project on the agenda for the talks is the Upper Trishuli 3A Hydropower Project being executed with a soft loan from the Export-Import (Exim) Bank of China. As the Chinese bank has stopped releasing funds to the contractors of the project, it is likely to miss the power production deadline of April 2019.
In 2011, the Chinese bank extended a $114.7 million concessional loan at an annual interest rate of 1.75 percent for 25 years, with a moratorium period of five years. The moratorium period expired in August 2016 before the project could be completed as construction had to be halted due to the earthquakes in April and May 2015.
Although the bank has agreed to extend the moratorium period and release the funds required to complete the construction, it is yet to make payment to the contractor, according to Ghimire.
“We will raise this issue strongly with our Chinese counterparts,” he said. Similarly, the meeting will study the progress of several transmission line projects being executed by Chinese companies, according to Ghimire.
Published: 01-12-2018 07:55