India pulls out of LoC funding for part of Rooppur power transmission work

India has withdrawn its line of credit (LoC) funding for a portion of a project that it has been entrusted with to build power transmission infrastructure for evacuating electricity from the country's maiden Nuclear Power Plant at Rooppur in Pabna.

Under the package-6 the project titled "Construction of Power Evacuation Facilities of Rooppur Nuclear Plant", a 20-kilometre crossing over Jamuna and Padma rivers was supposed to be implemented by an Indian contractor with LoC finance.

But the neighbouring country has now delisted the package from the LoC-3 as the Power Grid Company of Bangladesh  (PGCB) has failed to comply with funding conditions for it.

QM Shafiqul Islam, project director at the PGCB, told The Business Standard, "India has backtracked on LoC funding for the portion of the project even after an Indian contractor has been selected through an open bidding as tender conditions do not match with their financing conditions."

Earlier, the Power Grid Company of Bangladesh floated an international tender for implementing the package-6 as Indian contractors shortlisted by Exim Bank of India made much higher price proposals than the estimated cost for the work.

The power grid company is looking for an alternative source of financing to implement the work. 

MdYeakubElahi Chowdhury, executive (Director Planning & Development and Finance) at PGCB, told TBS, "We are looking for alternative finance to implement the project. And, we have processed further to select a contractor for the package," he said. 

The country's first nuclear power plant at Ishwardi in Pabna will have two units – each having 1,200 megawatts of capacity – and the first unit is scheduled to be ready by the first half of 2023.

To evacuate the electricity from this power plant,  the PGCB took up the project that includes five integrated packages of different transmission lines – 464km 400kV transmission lines including 13km river crossing, 205km 230kV transmission Lines including 7km river crossing, 400 kV four bay extensions, 230 kV five bay extensions and the frequency control and frequency drop protection, protection system, emergency control system and other associated tasks for qualitative upgradation of Bangladesh Power System.

From this scope of work, the PGCB separated the river-crossing work to package-6 due to some complexities. 

For implementing the project, the government inked a $1.06 billion loan agreement under LoC-3 with India in 2017 and India conditioned Bangladesh to award the contracts only to Indian firms. 

Appointment of Contractors for the other packages has already been completed and work on landlines is running. 

The project was scheduled to end within 2022 to transmit power from the 1,200MW RNPP Unit-1, which is expected to be ready by the first half of 2023.

But the power evaluation from the nuclear plant in the stipulated time has become uncertain as the contractor appointment for the package-6, which is a critical component of the transmission line, has not been done yet. 

MdYeakubElahi Chowdhury, however, said they are doing everything to construct the transmission line within the given time. 

"If foreign finance is not found, we will implement the component with our local fund," he also said. 

The estimated cost of this part is around Tk4, 000 crore, said PGCB sources.