Indian bidders benefit big from US funded power contracts in Nepal

Kathmandu:  Indian companies have emerged as the sole beneficiaries in the bid to construct the 315km transmission line in Nepal under the Millennium Challenge Corporation (MCC)-Compact Programme of the US government.

Millennium Challenge Account (MCA)-Nepal–a special purpose vehicle established to implement the MCC Compact Programme-said that six Indian companies participated in the bid to construct the high-capacity transmission line, whose contracts will be awarded in three packages.

After Nepal’s House of Representatives ratified the MCC-Compact Programme on February 27 last year with interpretative declaration amid controversy surrounding it, the door was opened for the implementation of the transmission line project with the US aid.

Besides constructing the 400kV transmission line, the $500 million US aid programme also aims to improve part of the East-West Highway.

Association of Megha Engineering and Infrastructure Ltd. and Power Mech Projects Ltd; Kalpataru Power Transmission Limited; KEC International Ltd; Transrail Lighting Ltd; Tata Projects Ltd and Larsen and Toubro Ltd are the Indian companies that participated in the bid, according to the MCA-Nepal.

“Though the MCA-Nepal called international bidding, only the Indian companies participated in the bid,” Khadga Bahadur Bisht, executive director of MCA-Nepal told India Narrative. “Even the Chinese companies and companies from other countries could also participate in the bid, but they didn’t take part in the bid.”

He said that others might have thought that they would not meet the criteria sought by the MCA-Nepal.

According to the MCA Nepal, only the private sector companies could participate in the bid. Companies from countries such as Cuba, North Korea, Iran and Syria are debarred or suspended from participation in procurements funded by the United States federal government.

The MCA-Nepal had invited bids by issuing a tender notice on November 28 last year and the bid submission deadline was extended till May 22. When the bids were opened, only the Indian companies were found to have participated in the bid.

Association of Megha Engineering and Infrastructure Ltd. and Power Mech Projects Ltd, a joint venture, has participated in bids for constructing all three packages of the works.

The three packages include: Lapsiphedi-Ratmate-New Hetauda 400kV D/C Transmission Line; Ratmate-New Damauli 400kV D/C Transmission Line and New Damauli-New Butwal 400kV D/C Transmission Line (Base) and New Butwal -Nepal/India Border 400kV D/C Transmission Line.

Transrail Lighting Ltd has participated in a bid to carry out a single package of constructing transmission lines from Lapsiphedi (Kathmandu) to Hetauda, the provincial capital of Bagmati province.

The remaining four bidders have participated in bids to construct two packages of the transmission line. Each package has got four bids from these six bidders.

The bidders for the transmission line project were confirmed ahead of the entry into force of the MCC Compact, which is scheduled to take place in August as per the understanding between Nepal and the MCC.

Bisht said that the contract would be awarded after the entry into force or implementation date of the MCC Compact in August.

He added that some of the bidders have worked in Nepal and have a good track record which could be helpful in constructing the transmission projects in Nepal.

Basically, the Indian companies will be involved in constructing the high-capacity transmission line in the middle of the country which is also a major consumption centre of electricity as Nepal’s capital Kathmandu and other cities including Butwal and Hetauda will also be connected by this transmission line project.

“Besides supplying electricity in major consumption centre of power, transmission line network constructed under the MCC compact will work a bridge to link eastern and western part of the country with high-capacity transmission lines,” Dirghayu Kumar Shrestha, chief of transmission directorate at Nepal Electricity Authority, state-owned power utility body said. “As the transmission line built with MCC aid is also being connected with a proposed Nepal-India cross border transmission line, it will also help in bilateral trade of electricity between Nepal and India.”

The transmission line to be built under the MCC assistance will be connected with the proposed Butwal-Gorakhpur Cross Border Transmission Line whose construction is expected to begin shortly this year. Under the MCC aid, the Nepal section of Butwal-Gorakhapur Cross Border Transmission Line will be built.

Until a year ago, the future of the MCC Compact Programme in Nepal was in doubt as it became a political hot potato issue in the Himalayan country after it was linked with the Indo-Pacific Strategy of the US, which many believe is aimed at containing China.

Nepal has adopted the non-alignment policy. But widespread rumours spread about the MCC being under Indo- Pacific Strategy leading to possible stationing of US troops in Nepal. Consequently, it invited protests from different groups against the MCC programme in the country.

US officials informally blamed the Chinese elements for spreading ‘disinformation’ and instigating protests against the US aid programme, while Chinese officials also accused the US of practising ‘coercive diplomacy’ in Nepal under the MCC grant programme. “Post ratification of the MCC Compact, the situation has calmed down to a large extent and the political environment has been very much favourable,” said Bisht.

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