Hyderabad-based IVRCAL Infrastructure Projects India has agreed to resume civil engineering works at the Rahughat Hydropower Project in Nepal after abandoning it midway. The company had terminated the contract unilaterally claiming that it suffered losses amounting to Rs 313.5 million due to frequent delays by the Nepal Electricity Authority (NEA) and demanded compensation.    

NEA said that IVRCAL has agreed to return to work upon receipt of Rs 140 million as damages. The NEA has also consented to raising the cost of the project by 25 per cent following the advice of an expert committee. The NEA will implement the deal with IVRCAL Infrastructure Projects India after its board gives the go-ahead. Since the problem has been resolved, the remaining work will be done soon. A budget has been allotted with high priority to the Rahughat project, said Bishnu Prasad Sharma, local development officer in Myagdi.    

Last year, IVRCAL Infrastructure Projects India terminated the project stating that it would be unable to carry out work at the designated rates which were finalized at the time of agreement. Since the contractor abandoned the project, it has been at a standstill. The Rahughat Hydropower Project called the company for talks saying that raising the price and terminating the project wasn’t possible as per the existing agreement.    

The civil engineering works at the project include construction of a 12-km entrance roadway, 7-km long tunnel, powerhouse, dam and search tank. IVRCAL Infrastructure Projects India and the NEA signed the agreement on November 4, 2010. On August 2, 2012, Exim Bank of India pledged to provide Rs 2.50 billion for the project.