KATHMANDU: The already-dawdling 102 MW Middle Bhotekoshi Hydropower Project in Sindhupalchowk district has been wedged in yet another quagmire with an audio leak scandal, exclusively obtained by Khabarhub, offering a bribe of Rs 20 million to its Chief Executive Officer (CEO) in developing it into a substandard project.

This is one piece of evidence to substantiate the negligence of Chinese contractor Guangxi Hydro-Electric Construction in completing the project within the stipulated time.

The Middle Bhotekoshi Hydro Power Project in the Sindhupalchowk district, some 66 kilometers north-east from the capital Kathmandu, is one of the latest examples of how the Chinese are involved in corrupt practices in Nepal.

The Chinese contractor is responsible to construct the main tunnel, powerhouse, dam and hydro-mechanical project.

The deadline to complete the project in the district bordering China has already been extended twice owing to the 2015 devastating earthquake, the Bhotekoshi flood, and the Chinese contractor “running out of money”.

Guangxi Hydro-Electric Construction, the contractor for the civil and hydro-mechanical works at the project, has failed to bring equipment citing lack of cash, raising concerns about the quality of construction.

The Chinese contractor has also been alleged of failing to maintain the quality of the construction even at the head works as per the contract agreement.

The construction of the project, which had to be completed by June 30, 2019, seems to be moving at a snail’s pace heading the project towards uncertainty. The construction work began in 2013 with plans to complete it in June 2017.

The audio recording was made public by the locals a few days ago. As soon as the audio was made public, the Commission for Investigation of Abuse of Authority (CIAA) launched an investigation into the matter.

So far, only 60 percent of physical progress has been made. The work of digging the 7.2-kilometer tunnel is still tottering. Four hundred meters of the tunnel have yet to be completed. The tunnel from Bhotekoshi and Chaku rivers from the Chaku confluence of the erstwhile Marming VDC in the district is yet to be dug.

In such a situation, the audio scandal of Rs 20 million bribe offer made public to make the project below average along with the negligence of Guangxi Hydro-Electric Construction has further distressed the general public.

The Middle Bhote Koshi, which has three turbines each generating 34 MW, will contribute to the national grid during the dry season. It has also reported a higher than average cost per megawatt of Rs137 million.

Rs 20 million offer audio scandal

Interpreter Gobinda Poudel on behalf of Guangxi Hydro Electronic, in a telephonic conversation, offered a bribe of Rs 20 million to Mani Kumar Kafle, Chief Executive Officer of Middle Bhotekoshi Hydropower Company. However, Kafle has not been heard of making any comment to the offer in the leaked audio recording.

Poudel tells CEO Kafle: “I have talked to Mr Lee (Chinese project authority). You just tell Mr. Lee that you have problem with the Mayor, and Lee will deal with the Mayor. Mr. Lee will pay up to Rs 2 crore if you are willing to accept. He is ready to pay the amount to you. He has asked me to talk to you. That’s the reason why I called you today.”

Kafle: “I have other stuff to accomplish. I will call you later.”

“I have repeatedly told you about the issue. You just have to give a nod. You will be benefitted. If you are in trouble, just let us know. Mr Lee will do the necessary in your favor…you just need to do what he (Lee) wants you to do. Don’t listen to Dawa. He is a fraud, and even threatened me with consequences, unnecessarily. ”

The audio recording (see bottom for detail conversation), which seems quite manipulating, was made public by the locals a few days ago. As soon as the audio was made public, the Commission for Investigation of Abuse of Authority (CIAA) launched an investigation into the matter.

Information Officer of the Commission Ganesh Bahadur Adhikari said that necessary investigation is underway.

With the release of the audio recording, some changes have been made in the project management. CEO Kafle has been relieved from the post while Project Chief Sunil Lama has been transferred to Kathmandu. Sources claim that Kafle and Lama had differences on several issues of the project.

CEO resigns after Rs 20 million audio scandal

Mani Kafle, the CEO of the project, has resigned as soon as the audio record of the ‘bargaining’ offer of Rs 20 million to the chief executive officer of the project was made public.

According to Subhash Mishra, chief executive officer of Chilime Hydropower Company, CEO Kafle has resigned.

Mishra said, “Some changes in the management of the project have been made after the audio episode. With CEO Kafle’s resignation, the project is currently in a trouble, and efforts are being made to resolve it.”

After the audio scam, Mishra — also the operator of Middle Bhotekoshi Hydropower — has been given the responsibility to look after the project. 

The construction work on the project is almost at a standstill. So far, only 60 percent of physical progress has been made. The work of digging the tunnel has not been completed yet.

In the audio recording, interpreter Poudel of Chinese contractor Guangxi is heard telling CEO Kafle that the company would pay Rs 20 million to him provided that he ensured that the project is complete below average.

Condition of the project undertaken by the Chinese contractor

Middle Bhote Koshi, established 10 years ago as a subsidiary of Chilime is constructing a 102MW project in Sindhupalchowk district. 

However, the project has not been able to pick up speed due to the negligence of Chinese contractor Guangxi Hydro-Electric Construction, which was awarded the contract for the construction of the tunnel and powerhouse at a cost of Rs 8 billion. 

The construction process itself is in a dilemma as the contractor did not complete the work even extending it twice.

Extreme factionalism within the project as well as project heads’ involvement in commission are other factors for the delay in completion of the project. 

Meanwhile, Austrian company Andes Hydro is yet to begin installing equipment in the electro-mechanical project. 

The work of removing the soil following the landslide in the powerhouse of the project last year has yet to be completed.

The construction work on the project is almost at a standstill. So far, only 60 percent of physical progress has been made. The work of digging the tunnel has not been completed yet.

Earlier, the project had sent a ‘Notice to Correct’ alerting the Chinese contractor to change the working method as per the rules of the contract.

The project will issue a ‘notice to correct’ letter as a last resort if the contractor dilly-dallied in the work. 

In its letter (notice), the company has asked Guangxi to bring equipment named by the consultant and maintain adequate stocks of construction materials.

The Company in a letter on February 27 had asked the contractor to mobilize proper equipment. It had also asked the Chinese contractor to put together construction materials in two weeks and complete digging the 250-meter tunnel in a month.

According to the agreement, the company had hired Guangxi under an engineering procurement and construction contract.

If the agreement is to be followed, the contractor should purchase all equipment on its own required for the construction.

The project, however, has neither been accelerated nor been canceled despite the project’s warning to cancel the contract process. 

However, the two local governments at the project site, Bhotekoshi Municipality and Barhabise Municipality, have suggested not to cancel the contract.

They even issued a statement saying that the construction of the project would be postponed further if the contract is canceled.

The Middle Bhote Koshi Project has share of Electricity Authority (10%), Chilime (38%), Employees Provident Fund depositors (19.5%), locals affected by the project (10%), general public (15%), Promoter Company employees (3.5%), Employees Provident Fund (3.5%), Sindhupalchowk Hydropower Company (1%), Sindhu Investment Company (1%), and Nepal Araniko Hydropower Company (1%).

Nima Phunjo Sherpa, mayor of Barhabise Municipality and coordinator of the Bhotekoshi Project Stakeholders Committee, said that the problem arose due to the tendency of the project’s key employees as they focus on commissions. Moreover, they rarely come to the project site since they prefer to stay in Kathmandu, he told Khabarhub.

“They, in fact, want to prolong the project to fulfill their vested interest as delaying the project will benefit the contractors and the staffers. Therefore, they are not concerned with the work because of which the problems have exacerbated,” Sherpa said.

Moreover, according to him, the extreme factionalism within the project as well as project heads’ involvement in commission are other factors for the delay in completion of the project. 

He said, “Extreme negligence is taking place in the Middle Bhote Koshi Project on the part of the contractors and the project officials.” 

According to him, the municipality has taken the issue seriously. “We will discuss the issue with the stakeholders and take initiative for necessary action.” 

The Middle Bhote Koshi Project has share of Electricity Authority (10%), Chilime (38%), Employees Provident Fund depositors (19.5%), locals affected by the project (10%), general public (15%), Promoter Company employees (3.5%), Employees Provident Fund (3.5%), Sindhupalchowk Hydropower Company (1%), Sindhu Investment Company (1%), and Nepal Araniko Hydropower Company (1%).

The cost of the project has reached over Rs. 14.84 billion.

The Middle Bhotekoshi Hydro Power Company Limited is a subsidiary company of Chilime, registered as a public company in July 2010. 

The company has planned to develop the Middle Bhotekoshi Hydroelectric Project with an installed capacity of 102 MW in the Sindhupalchowk district.

The Power Purchase Agreement (PPA) was signed with Nepal Electricity Authority (NEA) on 14 November 2011.