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Rs 3.60 billion bank guarantee seized after termination of contract for Sunkoshi Marin Diversion, Minister Ghising directs to expedite new tender process

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Ramechhap. The evaluation of the construction of the Sunkoshi Marin Diversion Multipurpose Project, a national pride project, is underway after breaking the contract for the supply and installation of civil structures including dam, power house, and gates.

The project had issued a 14-day public notice on November 10 annulling the contract agreement with Patel-Raman JV, Janakpur-9, Dhanusha for the construction of the package. The contract was terminated from November 8 as per the provision of the agreement.

After terminating the contract as per the agreement, the project has taken control of all the equipment, site office and construction site of the contractor. The work of the project so far, the equipment there, the remaining works to be added are being evaluated and the cost estimate is being prepared and tender documents are being prepared.

Minister for Energy, Water Resources and Irrigation, Physical Infrastructure and Transport, and Urban Development Kulman Ghising on Monday inspected the head works of the project at Seleghat of Manthali municipality-6 in Ramchhap and took stock of the condition of the project site after the cancellation of tender and the progress being made for issuing new tender.

On the occasion, Minister Ghising directed the project management and consultants to complete the evaluation work within two months and proceed with a new tender process.

He said, “A new tender should be issued accordingly after incorporating the works already done, the remaining works and additional works seen in the course of construction,” he said, adding that the construction of the tunnel projects should not be delayed and the process of new tender should be forwarded immediately by ensuring that the construction works are completed as per the new schedule. ’

The contract with Patel-Raman JV was terminated due to the fact that the physical progress was very low even after 61 percent of the contract was completed, there was no urgency to increase the progress and no interest was shown even when the notice was issued to improve the works as per the provisions of the contract.

With the cancellation of the contract, the project had forwarded the process to forfeit Rs 3.60 billion in bank guarantee, including Rs 2.40 billion kept by Patel-Raman JV as performance guarantee and Rs 1.20 billion in advance payment.

The contract for the project was signed with Patel-Raman JV at a cost of Rs 14.08 billion (including taxes). The Patel-Raman JV had bid about 32 percent less than the estimated cost. The contractor had started construction work from January 2079.

According to the agreement, the construction work should be completed by July 2084. However, the physical progress so far is only about 10 percent. So far, Rs 2.14 billion (about 15 percent) has been paid. The 13.3-kilometer tunnel was dug using boring machines. The tunnel was pierced on April 26, 2081. The water from the Sunkoshi River located on the border of Sindhuli and Ramechhap will be diverted to the Marin River through a dam and diverted to the Bagmati Irrigation Project.

The project aims to provide irrigation facility to 45,600 hectares of land and a total of 122,000 hectares of land in Dhanusha, Mahottari, Sarlahi, Rautahat and Bara districts.

A 31 MW hydropower will be generated by diverting water from the Sunkoshi River to Marin River. Sunkoshi Marin has been implemented as a project of national pride and transformation as it would provide year-round irrigation facility in five districts of Madhesh province, significantly improve the livelihood of farmers, contribute to the economy of the entire country by generating hydropower and also contribute to the provincial balance. The estimated cost of the project is Rs 49.42 billion.

Power line disconnected due to non-payment of electricity tariff

The transmission line of the Patel-Raman JV has been cut off after the electricity tariff was not paid during the construction of the project. Patel-Raman JV has outstanding dues of Rs 1.11 crore. According to the Nepal Electricity Authority (NEA), Ramechhap Distribution Centre, the power supply was cut off as the power supply has not been paid despite repeated reminders.

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