PHPA II: Nu 1.1 bn in irregularities

Chunk of it is Nu 500 mn for inadequate studies in relocating the powerhouse

The Royal Audit Authority (RAA) has reflected unresolved irregularities amounting to Nu 1.1 billion against the Punatshangchhu-ii Hydroelectric Project Authority (PHPA II) in 2016.

Based on the responses received after the issue of draft Annual Audit Report 2016 and action taken by the Project Authority, observations amounting to Nu. 80.089 million were either resolved or were not material enough for inclusion in the report. The total unresolved significant irregularities amounted to Nu 1,123.769 million in the final report.

Inadequate pre-construction investigations in relocation of powerhouse resulting in wasteful expenditure of Nu 500 million topped the unresolved significant irregularities according to the report.

According to the report the pre-feasibility study for the development of the project was carried out by a Norwegian Consultant, which was subsequently revised and submitted by WAPCOS in 2003-04 for preparation of a Detailed Project Report. The revised report indicated that a proposal of an Underground Power House for the project was not feasible on techno-economic consideration due to presence of multiple shear zones and preferred for Surface Power House.

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Despite repeated recommendations, neither the drift was excavated in the vicinity of PHC nor was the boreholes drilled at desired level from time to time. Even Detailed Geological Mapping was not explored to identify the shear zone. Thus, changing of power house setup from feasible SPH to complicated UH without carrying out pre construction investigation, non shifting of the DSSC, even after strong recommendations, and the large over-excavation resulted in hazardous mishaps where six lives were lost with three bodies still to be recovered implied wasteful expenditure of Nu 500 million”.

The RAA also issued one audit report of the Joint Audit of Mangdechu Hydropower Project Authority and unearthed irregularities worth Nu. 1,941.317 million in the draft  AAR 2016.

Based on the responses received and action taken by the project authority, observations amounting to Nu. 1,695.024 million were either resolved or were not material enough for inclusion in the report.

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The total unresolved significant irregularities amounted to Nu. 246.293 million for MHPA, according to the report

Payment of additional mobilisation advance without provision in the contact topped unresolved significant irregularities for MHPA.

The MHPA had made payments amounting to Nu. 138.300 million as interest free additional mobilisation advances, which were not provided for in the contract documents with resultant undue benefit to the contractors the reports states.

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