The contract also includes installation of 132-KV transmission lines to link with the national grid. The line will be 131 kilometers long.
A representative of the South Korea-based KHNP, and CHP Project Manager Keshav Raj Bhatta, signed the agreement amid a function at NEA head office on Thursday, NEA Spokesperson Danda Pani Basyal told myrepublica.com.
The NEA board meeting on April 23 had decided to award the contract worth Rs 3.8 billion for the electro-mechanical, hydro-mechanical and 132 KV transmission line construction work to the Korean company.
The deal was under controversy for months as KHNP was the single bidder for the contract. Another South Korea-based company Samsung C&T Corporation had earlier sent a proposal to the government of Nepal expressing its willingness to work at a lower cost. But the company backed down from the project in the first week of February saying that its proposal sent to the government of Nepal was based on wrong understanding, analysis and estimation.
“The contract was awarded to the company as per a provision of Public Procurement Act that says if any proposal is convincing it cannot be cancelled even if there is a single bidder,” Basyal said.
China Gezhouba Group Corporation (CGGC) started main civil works of the project from January 2007. The project completion deadline is 2011-12.
The total estimated cost of the entire project is US$ 99.9 million. The South Korean government under the Economic Development Cooperation Fund, a joint mechanism, provided US$ 45 million as “soft loan” to Nepal to commission the project. The two governments had also agreed to appoint a Korean firm as the main contractor for the project.