MCC transmission line tender set for cancellation as negotiations fail


October 13, 2023


MCC transmission line tender set for cancellation as negotiations fail

Image for Representation

KATHMANDU: The tender for the Millennium Challenge Corporation (MCC) transmission line, currently under evaluation, is slated for cancellation.

This decision comes after it was revealed that the minimum cost was 61 percent higher than the initial estimate provided by MCA Nepal, raising concerns about the credibility of the involved companies.

The tender, which was opened on May 22, was structured into three lots as part of the MCC project’s transmission line construction process.

According to reliable sources, the MCC officials insisted on the cancellation of the contract during a recent technical meeting with MCA Nepal.

Consequently, an official notification from MCA Nepal is expected to confirm the cancellation.

It may be noted that even Finance Minister Dr. Prakasharan Mahat took an interest in the matter, particularly in light of the unusually high proposed costs.

Despite some optimism about potential cost reductions through negotiation, this avenue was abandoned due to two critical factors.

Firstly, the substantial margin between the proposed and estimated costs made significant reductions seem implausible.

Secondly, there were concerns that any negotiated reduction might cast doubts on the integrity of the bidding company.

MCA Nepal had initially estimated the construction cost at $226 million, but the lowest bid reached a staggering $365.9 million.

Under Lot-1, the tender included the construction of 117 km from Lapsiphedi to Ratmate to Hetauda.

Lot-2 encompassed 90 km from Ratmate to Damauli, and Lot-3 involved 180 km from Damauli to Butwal, extending to the Indian border.

The transmission line, spanning a total of 315 km, was designed to operate at a capacity of 400 KV.

However, the environmental impact assessment indicated a significant toll, with the construction potentially necessitating the felling of 212,000 trees for the installation of 856 towers.