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Infrastructure major IVRCL Ltd has stopped work in the about Rs 300-crore hydel power project in Nepal, which it had won in 2010, demanding increase in the budget, sources said.
The company has halted construction of the 32 MW Rahughat Hydroelectric Project, saying the estimated cost has gone up substantially since 2010, sources added.
When contacted, a senior official of IVRCL admitted to having stopped work and said the issue is now being taken up by the Nepal Electricity Authority (NEA) and it may be resolved soon.
“The work order was given to IVRCL two years ago. While the company has moved machinery and all to the site, the Nepalese Government asked not to start the work until a Project Monitoring Cell (PMC) is established,” a source told PTI.
“Now, NEA says they are ready. However, IVRCL, keeping in view the delay in appointing PMC, demands project cost revision,” sources added.
The IVRCL official said the company’s demand may be under consideration by the Nepalese government so there will not be any issue.
“The PMC was appointed less than a month ago. Even before appointing PMC, we requested the Government to revise price. No company will take up works with two years old rates,” the IVRCL official said.
Sources indicated that the IVRCL has put in a demand for a minimum increase of 10 per cent over the original cost of Rs 300 crore project, which would have an installed capacity of 32 MW. The project is located in Myagdi District in Nepal.
The project, which is due to be completed by 2014, is unlikely to meet the deadline under the circumstances.
According to NEA’s annual report, the fund requirement for the project is $67 million out of which $31 million is available from the Export-Import Bank (EXIM Bank) of India.
A Credit Line Agreement was signed between the Nepal Government and Export-Import Bank of India, in 2007 for $100 million out of which $31 million was later allocated for implementation of Rahughat Hydroelectric Project.
Out of $31million available from EXIM Bank, $28.5 million will be utilised for the construction of Main Civil Works and remaining $2.5 million will be utilised for the consultancy services for the construction of main civil works.
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