It has been nearly three decades since the study began for the 20-megawatt Budhiganga Hydropower Project, which was proposed to be constructed in Safebagar Municipality–10 of Achham.

However, the construction process of the project has not been able to move forward till now. Although the government initiated the tender process three times, it was canceled on all three occasions. Even though a fourth tender was called, it has not been finalized yet.

According to the project, there were different reasons for the cancellation of the tender each time. The first time, it was due to a lack of competition; the second time, due to excessively high cost proposals; and the third time, because of the disapproval from the Saudi Fund (the main lender). Currently, the fourth tender process is underway, but the agreement has not been finalized yet due to the lack of consent from the lender.

The study for this project, which the government had proposed to construct on its own, began as early as 1995. According to the feasibility study and the environmental impact assessment, the project’s estimated cost is around NPR 10 billion. After completing the engineering design and environmental impact assessment, a loan agreement of NPR 6 billion was signed with the Saudi Fund for Development on June 18, 2014, for the construction of the project.

The duration of that agreement was until 2023. However, since construction did not progress within that period, the loan agreement has been extended until 2027. Similarly, another loan agreement worth NPR 1.8 billion was signed with the Kuwait Fund for Arab Economic Development on July 4, 2012, for the project. The remaining cost will be covered by the Government of Nepal.

To prepare the Detailed Project Report (DPR), an agreement was signed on June 29, 2015 with the Australian company SMEC International and Uday Consultancy. However, the DPR was only completed five years later, in 2020. According to the project, the preparation of the DPR cost around NPR 199.1 million.

The first tender process for the project began in August–September 2021. At that time, only one bid was submitted, so the process was canceled citing lack of competition. Since low competition in an international-level tender raises concerns about transparency and price competitiveness, the process was annulled. According to the regulations, at least three bidders must participate in such a tender for it to be considered valid.

According to the project, the second tender was called in March–April 2022. However, all construction companies quoted prices significantly higher than the estimated cost, leading to the cancellation of the tender. In the third round, held in September–October 2022, although a company submitted a bid at an appropriate price, the lender, the Saudi Fund, rejected it, stating that it did not meet their standards. The agreement was halted after the Saudi Fund expressed that the proposed contractor’s financial and technical aspects were inadequate.

In the fourth round, the notice for the project tender has already been issued and the evaluation process completed. However, the agreement has not yet been finalized, according to Surendra Ghimire, the head of the Budhiganga Hydropower Project. He stated that prior approval from the donor is required before signing the contract. Although all the necessary documents have already been sent, consent has not been received so far.

According to him, the main contract process for the project is still not finalized. Although tenders have been called for civil and hydromechanical works, the agreement has not been signed yet. “In the current fiscal year, there is a budget of NPR 2.196 billion for civil and hydromechanical works, and NPR 310 million for electromechanical works. But the agreement has not been reached,” said project chief Ghimire. “The construction process has been affected because the government has not been able to ensure the necessary budget.”

He also mentioned that since the project cost will now exceed the previously agreed amount, there are discussions underway about not requesting additional support from the lender and instead having the Government of Nepal manage the additional cost on its own.

So far, 320 ropanis of land have been acquired for the project. Land acquisition has been completed in three districts - Achham, Bajura, and Doti - for purposes including the powerhouse, substation, office buildings, and dam site. According to the project, 250 ropanis of land have been acquired in Achham, 50 in Doti, and 20 in Bajura. The process of land acquisition for transmission line towers has also begun, and the construction of a bridge has been completed.

Source: Kantipur