Contracts related to the construction of power transmission lines under the US-funded program MCC have been canceled. Sources have said that this decision was taken by MCA Nepal, the project implementing agency, in line with the suggestion of the MCC headquarters in Washington, USA, that the current contract should be canceled and a new process should be started.

The construction companies were informed about the cancelation of the contracts on Wednesday, an MCA Nepal official told Nepalkhabar. The official said that the specification and scope of work will be revised and a new tender notification will be released soon. There was difficulty in the selection of contractors after the bidders’ offer exceeded by 67 percent than estimated by MCA Nepal. The office floated two options to the MCC headquarters after the current process became controversial: adding insufficient budget or modifying the current specification and scope of work.

The government officials had suggested that they should go to the bidding process again after suspecting collusion among the contractors. The MCA had invited bids for the construction of 315 km power transmission line of 400 kV capacity at a cost of US $220 million on November 28, 2022. Six companies submitted their proposals. Out of them only five were selected through technical evaluation.

However, they were canceled after their financial proposal was more than two-thirds than estimated by the MCA Nepal. All these companies were Indian. A month and a half has elapsed by in the calendar of the project which should be completed within five years.