Reject all MCC Transmission Line Contracts, Indian Contractors are too Expensive

Kathmandu: All the contracts of the transmission line project under the Millennium Challenge Corporation (MCC) of American support have been cancelled. Millennium Challenge Account (MCA) Nepal issued a notice on Friday and informed that all these contracts have been cancelled.

Rajiv Dahal, information officer of MCA Nepal, told Bimapost that the contract was canceled because the bidders offered very high costs compared to the cost estimates made before the bidding. He said that preparations are being made to invite a new tender for the transmission line project.

According to Information Officer Dahal, the process was proposed to be canceled after the lowest offer in the tender was 66 percent higher than the cost estimate. The contract was canceled after the MCC headquarters approved the proposal made by the MCA. MCA Nepal had invited bids for the construction of the 315 km long transmission line project divided into three parts.

According to the tender that was opened on May 8, 6 companies submitted proposals to build the transmission line. Out of that only five companies were technically successful. India’s Kalpataru Power Transmission Limited, Transrail Lighting Limited, Tata Projects Limited, KEC International Limited, Larsen & Turbo Limited were technically successful and those companies applied for all three packages.

The first phase of the transmission line includes Lapsiphedi-Ratmate-New Hetaunda section. MCA-Nepal had estimated the cost of 764 million 64 thousand US dollars to build the transmission line of this section.

Among the companies that competed for the first phase, Transrail Lighting Limited, the company that placed the lowest contract, offered 130.15 million US dollars. It is said that the cost is 55 million 67 thousand US dollars, i.e. 72 percent more than the estimate.

Under the second phase, MCA Nepal had estimated the cost of 64.8 million 53 thousand US dollars for the Ratmate-New Damauli section. The lowest offer was made by Tata Projects Limited. Who proposed to build that section for 10 million 54 lakh 25 thousand. The lowest offer was 45 million 71 thousand more than the estimate of MCA. This cost is 62.5 percent more than the estimate.

Similarly, under the third phase, New Damauli-New Butwal transmission line has been designated up to the border of India. MCA Nepal has estimated the cost of constructing the transmission line of this section at 79.2 million 82 thousand. However, Tata Projects Limited, which offered the lowest amount, offered 129 million 21 thousand dollars. That amount is 62.73 percent more than the cost estimate, i.e. 49.7 million US dollars.

In this way, MCA Nepal estimated the total cost of 226 million US dollars for the transmission line to be built with the support of MCC. However, the lowest price offered by the companies was 36.59 billion US dollars, which is said to be 66 percent higher than the cost estimate.