NEA to hold talks with Rahughat project developer

The Nepal Electricity Authority (NEA) has formed a high-level committee to hold dialogues with IVRCL Infrastructures & Projects Ltd, an Indian company that bagged the contract for developing Rahughat Hydroelectricity Project (32 MW), but has stalled works demanding upward revision of costs.
"We study the situation and hold dialogues with IVRCL," said Managing Director of NEA Rameshwore Yadav, who is heads the committee formed to hold talks with the Indian company. "We will also study whether such projects benefit NEA."
The four-member committee that will hold dialogues with IVRCL also has the mandate to decide whether or not to revise the cost of the project, according to NEA officials. “I can´t say anything now but we may have to make an upward revision of costs if we want project to complete," an official from NEA said on condition of anonymity.
NEA, which is developing Rahughat with soft loans from Exim Bank of India, is also mulling to stop developing small scale projects. "We are thinking not to handle projects with the capacity of less than 100 MW," Yadav said. "These kind of small projects only kill the time and resources of NEA."
IVRCL has halted the project works for a month demanding cost adjustment with increased prices. The project was awarded to IVRCL in November 2010 and was expected to complete in 42 months. “We think it too late now to make a cost adjustment," Yadav said.
According to NEA officials, the government had signed a contract agreement worth Rs 2.5 billion with IVRCL. "IVRCL is pressing us for cost readjustment two years after signing the contract agreement. This is not ideally acceptable," an official of the project said.
The locals have pushed for early completion of the run-of-the-river project is based in Myagdi -- a hilly district in mid-western part of the country. "This is completely an issue between NEA and contractor IVRCL," Dilip Poudel, Republica´s Baglung based reporter said over phone. "Locals want this project to be completed on time."