The Finance Minister while answering a question in the National Council in the recent Parliament session said that Bhutan had incurred a revenue loss of Nu 1.3 bn in 2020 due to the downing of Unit-3 turbine and it would incur another Nu 1.8 bn loss in 2021 if the unit cannot be repaired before the end of the monsoon season.
The minister had given the Nu 1.8 bn loss figure for 2021 based on the turbine being repaired only by around September 2021.
However, the Mangdechu Hydropower Project is aiming to restore the the third unit by the end of July 2021.
If this is successful a senior Mangdechu project official said that the loss will not be Nu 1.8 bn but it will instead come down to Nu 1.2 bn which would mean a saving of around Nu 600 mn.
The main power generation months of the year based on the rainfall are May, June, July, August and September.
The official said that the calculation in monsoon when the river is in full spate is that one unit can generate Nu 553 mn in revenue in the month of June. This comes to around Nu 2.212 bn for the four units in a monsoon month.
The official said that if Bhutan is lucky and the monsoon stretches on longer till mid October then the notion loss may be further reduced. He claimed that the water flow in parts of June and even in the first week of July had not been high enough to use all four machines.
Last year, Bhutan had generated around Nu 12 bn in revenue from the project.
The official, however, said if any issue crops up then the installation may happen only by August or September 2021.
Troubled 3rd Unit
The troubled third unit has given problems right from the beginning itself. In September 2019 this unit applied the breaks on itself leading to the break pad finishing and a lot of carbonization that spread throughout the equipment.
The same unit again gave problems on 23rd May 2020 in the peak monsoon season and there was a shutdown till 27th June. This is where a chunk of the Nu 1.3 bn loss happened.
This third unit ran till 21st September 2020 but then it completely gave up and there was even a fire that took place. The third unit has been shut down till date.
Repairs and negotiation
The official said that the local Bhutanese team right from 21st September opened up the whole machine and started repairs to do a complete overhaul.
In the meantime, the Project, DGPC and Department of Hydropower and Power Systems decided that given the earlier issues in the turbines and the earlier failures of the third unit this time some short cut or temporary work will not do and so it called on BHEL to do some extensive work.
BHEL on its part was miffed that some of its payment coming to around Nu 300 mn had been held up and so some time was taken in discussions between Bhutan and BHEL.
Ultimately Bhutan released those payments to BHEL which now totals around Nu 7 bn. However, the Bhutanese team did not stop working and continued work to overhaul the third unit.
On 27th January BHEL was given a Nu 162 mn tender to fix the third unit.
The official said the extent of the work on the turbine is such that the whole machine has been overhauled with a lot of parts replaced and many parts cleaned and so it is almost like a new unit.
He said the flash over and short circuit had not only caused a fire in the unit but everything had been carbonized which spread like a disease and there was a lot of wear and tear.
Technical team to decide fault
The official said that a technical team consisting of a retired Power Systems CEO from India, a Director Technical from the National Hydropower Corporation of India and the former MoEA Secretary Dasho Yeshi Wangdi will give their findings on whether the failure was due to the equipment being faulty as said by the project and Bhutan or due to human error as alleged by BHEL.
Whichever side is at fault will have to foot the Nu 162 mn bill though it is most likely that in either case the insurance companies will have to pay provided that the insurance companies are convinced.
A source on the condition of anonymity said that while the report is yet to come out the Bhutanese side is convinced that BHEL supplied a faulty unit right from the start.
The source said that when the unit was opened up they found a lot of workmanship issues and the machines were not constructed properly, the windings were not done properly and there were 5 to 7 failures or faults by the the equipment and with each fault the people in Bhutan had been corresponding with BHEL but BHEL had not been very forthcoming.
The source also said that BHEL equipment has always given issues and problems from the Chukha days and including in the Tala project too and now Mangdechu and that their works are not much appreciated on the quality front.
The official said that this can even be verified internationally.
Bhutan has around Nu 700 mn with it withheld from BHEL as the 10 percent of the Nu 7 bn under the defect liability period.
Trouble from day one
Apart from the third unit there were problems with the overall control system, and also other units including oil leakage in the project.
It has been learnt that trouble started from day one itself when the first unit was commissioned on 16th June 2019 and continued even after the final turbine was inaugurated on 17th August 2019.
One issue was the lubricating oil leaking out of the Bearing System in two locations that surrounds the generator above and turbine below.
Another issue was the water Nozzle Injector which regulates the amount of water that hits the peltons that turns the turbine to generate electricity. The water nozzle has been behaving erratically which was causing concern among project officials. That nozzle injector is controlled through a Governor which is the control system which also has problems.
The third issue which is related to the above is the Computer Controls and Monitoring Systems provided by BHEL which is equivalent to the brain and nervous system of the electro-mechanical equipment. This automated computer system takes in feedback and information from around 3,000 sensors including the turbines and either displays them or takes action.
This critical computer system was giving problems as its sensors were not functioning properly by giving erroneous reading or not giving readings at all.
With the frequent failure of the Computer Controls System the Mangdechu staff were operating the plant using manual commands. Each turbine will require 25 manual commands in a stage wise process to start and run.
BHEL which is a Public Sector Undertaking (PSU) company owned by the Indian government is the monopoly electro-mechanical equipment supplier from India and it apart from Mangdechu had got contracts to supply equipment to Punatsangchu I and II projects.
Bhutan in the past had made unsuccessful efforts to allow private companies to compete apart from BHEL.