Kutehr-IE Phase1 Report

KUTEHR
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KUTEHR HYDROPOWER PROJECT - Independent Engineer - Phase 1 Report Revision No: 0
ConsultDM no. 3 January 2020
Document information
Document title KUTEHR HYDROPOWER PROJECT

Independent Engineer - Phase 1 Report
Client organisation State Bank of India
Client contact Client contact
ConsultDM number ConsultDM no.
Project Manager Ajit garg
Project number Project number
Revision history
Revision 0
Revision description
Prepared by Lal Chand Goyal
Reviewed by Ajit Garg
Approved by Kavish Bibra
(name) (signature) (date)
Distributed to Client contact State Bank of India

(name) (organisation) (date)
Executive summary
Tangsibji Hydro Energy Limited (THyE), 100% owned subsidiary of Druk Green Power Corporation
Limited, is implementing 118 MW run-of- river Nikachhu Hydropower Project across Nikachhu river,
a right bank tributary of Mangdechhu River in District Trongsa of Central Region of the Royal
Kingdom of Bhutan.
The project envisages the construction of a 38 m high concrete gravity dam, intake structure,
desilting chamber, 12.144 km long head race tunnel, surge tank, pressure shafts, underground power
house, transformer cavern and a tail race tunnel.
The preliminary infrastructure development works such as construction of access roads to adits,
bridge, temporary site office and arrangement of construction power have been completed. This was
evident during site visit by Entura team. The contracts for the project are signed and site mobilization
is in process. Entura specialists visited the site during December, 2015.
The hydrology of the project was independently reviewed by Entura’s specialist. The review work
involved to validate catchment area, water availability, design flood studies and sedimentation
studies. All the hydrology related aspects were studied in details by Entura and found these in order.
Subsequent to review of hydrology, Entura independently carried out the power potential studies.
The 90% dependable year i.e. 1993-1994 used for power potential studies in the detailed project
report was examined and found to be in order. Entura carried out an independent assessment to
validate the energy generation. The annual energy generation for 90% dependable year (with 95%
machine availability) works out to 493.29 MU as against 491.52 MU calculated in DPR. The plant load
factor at 95% machine availability, works out to 47.72%.
Geologically the project area lies in the Central Crystalline belt and is surrounded by the lithology of
Thimphu Group of rocks and metasedimets of Chekha Formation. Thimphu Group comprises
varieties of gneiss, migmatites, amphibolites and schists; these groups of rocks are surrounded by
metesediments of Chekha Formation belong to the Tethyan sequence and is exposed in the west and
south. The project components will be executed in different kinds of gneissic and schist rocks along
with metasediments.
Seismically the project area is located in high seismic region of Himalaya, which falls under seismic
zone V as per the seismic zoning map of India. According to Site specific seismic study undertaken by
to IIT Roorkee the horizontal ground motions for MCE and DBE were worked out as 0.50g and 0.29g
respectively and for vertical ground motions the values are 0.33g and 0.19g respectively.
The size of the underground powerhouse was checked and is considered adequate to accommodate
2 Pelton turbines of 59MW each. For the given head the selection of Pelton turbine is also considered
appropriate. The selected turbine design parameters including rotational speed, specific speed,
centre line of turbines, efficiency etc. were also reviewed and found in order. The other design
parameters like the provision of bearing arrangement with thrust bearing located above rotor,
excitation system, works assembly and site assembly of rotor, weight of generator rotor, weight of
stator and selection of crane capacity, the weighted average efficiency of generator, minimum factor
of safety for generator parts under worst condition etc. are also in order.
Power Purchased Agreement (PPA) between THyE & PTC India Limited reviewed for effective date,
tenure, price, payment terms, payment mechanism, obligation of parties, events of defaults,
Liquidated damages & terminations of Contracts. All those aspects are properly addressed in the PPA
& well drafted.
i
Power is proposed to be evacuated through a 132 kV double circuit overhead transmission line to
interconnect to 400/132 kV, 200 MVA ICT station provided at Mangdechhu hydropower project
Pothead yard. Further evacuation to Indian border from Mangdechhu hydropower project shall be
along Mangdechhu transmission system. The estimated length of the transmission line from
Nikachhu hydropower project powerhouse to Mangdechhu hydropower project pothead yard is
about 18.6 km. Necessary Environmental clearance and Right of the way for construction of 132 kV
Transmission line are available & MoU for construction of the line is signed with BPC to complete the
work by January2019.
The project is being executed as EPC contract. The contract for Main Package, MP-1 for Civil & Hydro-
Mechanical works has been awarded to M/s HCC. The contract for Main Package, MP-2 for Electro-
Mechanical works has been awarded to M/s Voith. Transmission line work is being implemented
through MoU route by BPC (Bhutan Power Corporation Limited). In this regard a MoU has been
signed between THyE and BPC.
The scope of work, interface issues, reasonability of contract price, clauses related to adjustments
and variations of price, defect liability and issues related to liquidated damages have been examined
and found in order. The power purchase agreement (PPA) is also reviewed and found in order, which
is as per the market norms. No risk is foreseen because of conditions set out in PPA.
Entura has been provided with the optimised construction schedule for the project. As per the
schedule and executed contracts, the Nikacchu hydropower project is planned to be completed in
1460 days (or 48 months). Entura reviewed the planning and methodology of constructions as well as
construction schedule, which seems adequate and satisfactory without any force majeure.
The cost of the project was reviewed based on the current layout, geology, price variations, price
escalations and other risks which may have an impact on the project cost. The base case costs as
provided by THyE are found to be in order.
Development of a hydropower project in Bhutan requires obtaining permits from a number of

government bodies, and agreement from a wide range of government and public utilities in granting
of the permits. Entura reviewed the available licenses and permits and concluded that the THyE has
obtained all the requisite permits and clearances for the project.
After in-depth examination of the available data and site visit, it is apprehended that the project is
well conceived and planning for execution and implementation is satisfactory. The capability and
experience of the project participants is key to satisfactory execution of such projects and Entura is
comfortable with the stakeholders involved in this project.
Contents
1. Introduction 1
1.1 Project features 1
1.2 Project accessibility 2
2. Site visit and review of current project status 3

2.1 General 3
2.2 Civil Works 3
2.2.1 Diversion Tunnel, Dam and Intake 3
2.2.2 De-silting Arrangement 6
2.3 Head Race Tunnel 6
2.4 Surge Shaft 9
2.5 Pressure Shaft 9
2.5.1 Power House Complex 10
2.5.2 Tailrace outlet 11
2.5.3 Construction Power 11
3. Review of Hydrology 13
3.1 Introduction 13
3.2 Catchment Area 13
3.3 Water availability Studies 13
3.3.1 Stream flow records 13
3.3.2 Methodology 14
3.4 Design Flood 14
3.5 Sedimentation 15
4. Review of Power Potential 16

4.1 Introduction 16
4.2 As per Detailed Project Report 16
4.3 Entura’s Observation 16
4.3.1 Inputs as derived from the signed contracts 17
4.3.2 Head for Power Generation 17
4.3.3 Computation of Energy 17
5. Review of Project components 19

5.1 General 19
5.2 River Diversion Works 19
5.3 Diversion Dam 20
5.4 Intake Structure 21
5.5 Desilting arrangement 21
5.6 Head race tunnel (HRT) 22
5.7 Surge Shaft 23
5.8 Pressure Shaft Tunnels 24
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5.9 Power house 24

5.10 Electro-mechanical equipment 25
5.11 Tailrace tunnel 26
5.12 Head loss 26
5.13 Power evacuation 26
6. Review of Contracts 28
6.1 Introduction 28
6.2 Review of Main Contract Package, MP – 1 (Civil and Hydro – Mechanical
Works) 29
6.2.1 Scope of work 29
6.2.2 Subcontractors 29
6.2.3 Commencement Date 30
6.2.4 Completion & commissioning date 30
6.2.5 Contract price and its reasonability 30
6.2.6 Price Adjustments 31
6.2.7 Price Variations 31
6.2.8 Defects notification period 31
6.2.9 Damages for delay 32
6.2.10 Extension of time 32
6.2.11 Retention money 32
6.2.12 Governing Laws and Arbitration 32
6.2.13 Functional Review of works 32
6.3 Review of Main Contract Package, MP – 2 (Electro – Mechanical Works) 33
6.3.2 Subcontractors 33
6.3.7 Price Variations 35
6.3.8 Defects Liability 35
6.3.10 Performance Guarantee 36
6.3.11 Price variation 37
6.3.12 Governing Laws and Arbitration 38
6.3.14 Assessment of credentials of contractors 38
6.4 Transmission Line Works 38

6.5 Owners Engineers contract 40
7. Review of PPA 42
7.1 Introduction 42
7.2 Effective Date 42
7.3 Tenure 42
7.4 Price 42
7.5 Payment, Payment Terms & Payment Mechanism 43
7.6 Events of Default 43
7.7 Obligation of Parties 44
7.7.1 Seller’s Obligation 44
7.7.2 Procurer’s Obligation 44
7.7.3 Joint responsibilities of the Procurer and the Seller 45
7.8 Penalties 45
7.8.1 Liquidated Damages for Delay in Commencement of Supply of Power to
Procurer 45
7.8.2 Delay in Offtake of Power by the Procurer 46
7.8.3 Limit on amounts payable due to default 46
7.8.4 Penalty for shortfall in Supply of Power 46
7.8.5 Transmission Losses 46
7.9 Termination 47
7.9.1 Termination due to Seller Event of Default 47
7.9.2 Termination due to Procurer Event of Default 47
7.9.3 Termination due to Force Majeure 48
7.10 Conclusion 48
8. Review of construction and disbursement schedule 49

8.1 General 49
8.2 Review of Pre- construction Activities 49
8.3 Review of proposed methodology by MP-1 contractor HCC 49
8.3.1 Review of proposed infrastructure works 50
8.4 Review of construction methodology of major components 51
8.4.1 River Diversion 51
8.4.2 Dam 52
8.4.3 Power Intake & feeder tunnel 53
The period considered for construction of Power Intake & feeder tunnel are
found to be in order. 53
8.4.4 Desilting Chambers & service tunnels 53
v
8.4.5 Head Race Tunnel 54

8.4.6 Surge Shaft 55
8.4.7 Valve Chamber 56
The period considered for construction of valve chamber is found to be in
order. 56
8.4.8 Pressure Shaft 56
8.4.9 Power House Complex 56
8.4.10 Construction Schedule 57
8.4.11 Electro-Mechanical Works 57
8.4.12 Transmission System 57
8.4.13 Testing and Commissioning 58
8.5 Conclusion 58
9. Review of Project cost 59

9.1 Introduction 59
9.2 Reconciled and updated Project Cost 59
9.3 Reasonability of prices 60
9.4 Cost variations 60
9.4.1 Cost optimisations 60
9.4.2 Cost implications on account of HRT rock class revalidation by Entura 61
9.5 Review of suitability of Contingency 61
9.6 Review of the proposed disbursement schedule 62
10. Review of Operations and Maintenance cost & arrangements 63

10.1 Operation & Maintenance cost 63
10.2 Operation & Maintenance Strategy 63
11. Review of Acquired Project Land 64

11.1 Introduction 64
11.2 Review of status of land acquisition 64
12. Review of Approvals & clearances 68

12.1 Introduction 68
12.2 Available Permits, Clearances and Approvals 68
13. Review of pre-disbursement conditions 1
14. References 9
Appendices
A Appendix heading
A.1.1 Appendix heading 3
Annexure
List of figures
Figure 2.1: View of bridge to access the diversion portal on right bank of Nikachhu River 3
Figure 2.2: Access road to intake and diversion tunnel portals 4
Figure 2.3: View of left abutment of Dam 4
Figure 2.4: View of Drift on left bank along Dam Axis 5
Figure 2.5: View of Temporary site office, residential buildings 5
Figure 2.6: Access road to adit-1 6
Figure 2.8: View of Adit-3 Portal 7
Figure 2.9: View of Adit-4 portal 8
Figure 2.11: View of adit portal to surge shaft 9
Figure 2.12: View of intermediate adit portal to pressure shaft 10
Figure 2.13: Access road to powerhouse complex 10
Figure 2.14: Outlet portal of main access tunnel 11
List of tables
Table 4.1: Power Potential Study of 90% Dependable year 1993-1994 18
Table 5.1: Percentage of rockmass class along HRT 22
Table 11.1: Status of Land Acquisition for works except access roads 64
Table 11.2: Status of Land Acquisition for access road 67
vii
1. Introduction
Tangsibji Hydro Energy Limited (THyE), 100% owned subsidiary of Druk Green Power Corporation
Limited, is implementing 2x59 MW Nikachhu Hydropower Project across Nikachhu river, a right bank
tributary of Mangdechhu River in District Trongsa of Central Region of the Royal Kingdom of Bhutan.
THyE is proposing to avail Indian (rupee) funding for the project with State Bank of India (SBI) being
the lead lender. SBI vide reference no. PFSBUT/T-9/THEL/1613 dated 5 th November, 2015 has
appointed Entura Hydro Tasmania India Private Limited (Entura) as Lenders’ Engineer for the project.
This report presents Entura’s review on the existing reports / data, contract documents, technical
specifications, owner’s requirements, site visit and findings.
1.1 Project features
The project is envisaged the following components and features:

 A 38 m high concrete gravity dam (from the deepest foundation level) located on River
Nikachhu.
 The Full Reservoir Level (FRL) of Nikachhu hydro power project is at El. 2292 m. The total
storage volume at FRL is 0.537 MCM. Accordingly the Minimum Draw-Down Level (MDDL) has
been fixed at El. 2283.80 m to provide the live storage of 0.307 MCM. The dead storage at
MDDL is 0.230 MCM.
 Three nos. of Orifice type spillways and 1 no of high level spillway are provided to pass a design
flood of 2400 m3/s at crest level 2270.0 and 2283.5 m respectively.
 One no. of 300 mm dia. GI pipe on right bank from Dam Non overflow block No. 7 is provided
for ecological flow
 Intake structure is on upstream of dam approximately 25-30 m from dam axis.
 Feeder tunnel of diameter 4.0 m, length 264.19 m modified horse shoe shaped with slope 1V
to 528.30H.
 Two nos. of underground desilting chamber of width 7.5 m diameter have been provided with
two separate unit of silt flushing tunnels, gate arrangements and finally merging into single silt
flushing tunnel of size 2.0 m × 2.5 m D-shaped.
 One no. head race tunnel of 4.0 m diameter modified horse-shoe shaped, 12144.9 m long is
provided at left bank.
 Surge shaft of 10.5 m diameter and 57.2 m high is provided upstream of power house to
accommodate surge waves and water hammer pressure.
 Valve house chamber is provided along the pressure shaft, 156 m apart from surge shaft to
house penstock protection valve.
 Inclined pressure shaft having angle 50 o is provided after valve chamber upto manifold and
branched into two nos. unit pressure shafts feeding main power house units.
 A 19 m wide cavern housing two units each of 59 MW Pelton turbines, with service bay at left
and control room at right has been provided in the underground power house. A 150 ton
capacity crane is provided, which will move in both directions.
1
 Transformer hall cavern is 14 m wide, which will accommodate single phase transformers and
GIS. Five ton capacity crane is provided to carry heavy GIS and other electrical parts.
 One tail race tunnel of 4.0 m diameter modified horse-shoe shape will carry water to river.
 To facilitate the construction and operation of the project components, suitable adits and
access roads have been proposed.
1.2 Project accessibility
The project is accessible from Thimphu, the capital of Bhutan by road. Thimphu is well connected by
air with key cities in the South and South East Asia. The dam site is about 165 km and the
powerhouse site is about 195km from Thimphu. Bhutan is the neighbouring country of India and is
accessible by road from India though several entry points. The nearest entry point by road for
Thimphu is Phuentsholing, which is about 150km from Bagdogra, India.
2
2. Site visit and review of current project status

2.1 General
A team of engineers from Entura visited the Nikachhu hydropower project site from 16 th to 20th
December, 2015. The entire project components i.e. dam, intake, adits for headrace tunnel, surge
shaft, pressure shaft and powerhouse complex were visited to ascertain the status of infrastructure
works for all the project components.
The visit enabled the team members to gain first-hand information and appreciation of the project
site. Observations and interpretations based on the site visit have been discussed below.
2.2 Civil Works
2.2.1 Diversion Tunnel, Dam and Intake
The Diversion tunnel, Dam and Intake are located near Lorim. The access road and temporary bridge
on Nikachhu River to access diversion tunnel inlet and outlet portal, dam and intake was completed.
The work for temporary site office and residential buildings was in progress.
Figure 2.1: View of bridge to access the diversion portal on right bank of Nikachhu River
3
Figure 2.2: Access road to intake and diversion tunnel portals
Figure 2.3: View of left abutment of Dam
4
Figure 2.4: View of Drift on left bank along Dam Axis
Figure 2.5: View of Temporary site office, residential buildings
5
2.2.2 De-silting Arrangement
Approach roads were not constructed to access the de-silting arrangement. It was reported that the
approach road to Desilting Chambers is within the scope of the Civil Contractor. The size of the
Desilting Chamber shall be finalized after carrying out the hydraulic model study.
2.3 Head Race Tunnel
The headrace tunnel is proposed on the left bank of Nikachhu River. Five intermediate adits are
proposed along the alignment of HRT for excavation of tunnel from de-silting chambers to surge
shaft. Access roads to all adit portals were completed.
The work for temporary site office and residential buildings was under progress during the time of
site visit.
Figure 2.6: Access road to adit-1
6
Figure 2.8: View of Adit-3 Portal
7
Figure 2.9: View of Adit-4 portal
8
2.4 Surge Shaft
An underground surge shaft has been proposed at the end of HRT. Excavation of surge shaft is
proposed from top and bottom through adits at top and bottom of surge shaft. Access roads for both
the adits have been completed.
Figure 2.11: View of adit portal to surge shaft
2.5 Pressure Shaft
An inclined pressure shaft is proposed from the surge shaft to powerhouse. An intermediate adit is
proposed at the middle of the inclined portion of pressure shaft for ease in construction.
The approach road to access intermediate adit is complete.
9
Figure 2.12: View of intermediate adit portal to pressure shaft
2.5.1 Power House Complex
The Powerhouse complex consists of powerhouse cavern, transformer cavern, adits and tailrace
Tunnel. The excavation of powerhouse and transformer caverns shall be done from adit at top of the
caverns and Main Access Tunnel (MAT). The construction of the approach road to portal of MAT and
access adit was under progress during the time of site visit.
Figure 2.13: Access road to powerhouse complex
10
Figure 2.14: Outlet portal of main access tunnel
2.5.2 Tailrace outlet
The tailrace shall be excavated through adit via main access tunnel.
2.5.3 Construction Power
The power supply for construction activities in all the project areas shall be at 33 kV system which is
adequate to meet the power requirements. The construction power supply to Dam Site, Adit-I, Adit-
II, Adit-III, Adit-IV shall be met by tapping 33 kV Taktse Spur Feeder passing through these areas. The
construction power supply to Adit-V, Surge Shaft, Power House and TRT shall be met by extending
the 33 kV Nubi Feeder. The Feeders and number of Sub-Stations required are chosen as per its
proximity to the aforementioned Feeders and the distance from each other. The components closer
to each other shall be supplied power from same Sub-Station with adequate capacity to meet the
requirement of power at both locations.
The capacity of 33/0.415 kV Sub-Stations proposed at six locations namely Dam Site of the project is
as detailed below:
Sl. No. Project Components Capacity under execution
1. Power House, PS & TRT 2x 750 kVA
2. Adit-V and Surge Shaft & BFVC S/S and BFV- 2 x 250, Adit V-2 x250
3. ADIT-IV 2 x 250 kVA
4. ADIT-III 2 x 250 kVA
5. ADIT-II 2x 250 kVA
11
6. Dam site and ADIT-I 2x 750 kVA at Dam site
For redundancy and reliability of the power supply, the inter-connection of Taktse Feeder and Nubi
Feeder shall be done by inter-connecting the lines between Adit-IV and Adit-V. The total distance for
interconnection shall be maximum of 9 km.
In-case of outage and maintenance of Kewathang-Yurmo line, the power supply in the project area
can be met from Endocholing Sub-Station. This arrangement requires extending approximately 6 km
line from Yurmo to Endocholing Sub-Station. The total line length of 33 kV Conductor required is
approximately 15 km.
About 80% of the construction of 33 kV line were completed at the time of site visit.
Project Layout and 33 kV existing Transmission Line ( in red colour)
Google Map of existing 33 kV System in project area (indicated by blue colour)
12
3. Review of Hydrology
3.1 Introduction
The review of the hydrological report, presented in the detailed project report of Nikachhu
hydropower project, has been carried out by Entura. The aspects covered in this review are
catchment area, water availability, design flood studies and sedimentation studies.
The observed flow series at Chendebji, Bjizam and Kurjey gauging stations located on Nikachhu,
Mangdechhu and Chamkher Chhu respectively have been used to derive the long term flow series
and power potential studies in detailed project report. Entura carried out their review studies based
on the above aspects and data given in the report, which is described below.
3.2 Catchment Area
The proposed diversion structure is located at latitude 27 26’ 54.8” N and longitude 90 22’ 24.25” E
and intercepts an area of 373km2. The permanent snow line in the region is at 5000m and accordingly
the permanent snow fed area is only 0.1km 2.
The northern region of the catchment has steep slopes and covers major portion of the catchment
while flatter slopes exist towards eastern side. The area is covered with dense forest.
The temperature of the region varies widely with location and altitude. The Chendbeji station located
in the catchment experiences average temperature varying between 21.3 C during August to -0.7C
in January.
The rainfall is due to South West monsoon and gets affected due to mountainous system.
Precipitation occurs during the period June to September while maximum rainfall occurs during the
month of July and minimum during December. Precipitation reduces from South to North direction.
Enutra’s Observation
The total catchment area as presented in the detailed project report has been reviewed by using
Google Earth, as the project topographic sheets were not available. The catchment area is found to
be in order with detailed project report.
3.3 Water availability Studies
3.3.1 Stream flow records
The observed daily discharge data of five gauging stations is available and is tabulated below:
13
Sl. Gauging River Catchment Data Period

No. Station Area (km²)
1. Chendebji Nikachhu 278 July 2009 to September 2012, January

and February 2013
2. Kurjey Chamkher Chhu 1350 June 1991 to December 2012

3. Bjizam Mangdechhu 1390 March 1994 to December 2011
4. Chimakotiam Wang Chhu 3550 January 1976 to August 2011
5. Lungtenphug Thimphu Chhu 663 May 1991 to December 2012
The Chendebji gauging station is located 3.5 km upstream of the proposed dam site on Nikachhu
River. Therefore, 3 years of site specific data is available to develop the long term discharge series.
3.3.2 Methodology
The 10 daily discharge data at Nikachhu Dam site has been derived from discharge at Chendebji by
catchment area proportion for the period July 2009 to February 2013. The 10 daily discharge series
derived from this data is insufficient to establish water availability for a large hydro power project of
the order of 100 MW or more. The ten-daily discharge data series from Bjizam gauge station has
been used to derive the long term series.
Observed data at gauge station Bjizam is available from 1994 to 2011 except for the year 2009 and
the observed data at gauge station Kurjey for 1991 to 2012 has been used to derive the 10 daily
discharge series at Bjizam for the years 1991 to 1994 and 2009.
A 10 daily runoff-runoff correlation between Bjizam and Nikachhu was developed for the concurrent
period. The same was utilized to develop a long term runoff series at Nikachhu site for the period
June 1991 to May 2011.
The methodology adopted for deriving long term series at Nikachhu dam site is found in conformity
with the standard practice. The correlation equation between flows of Nikachhu dam site and
Mangdechhu at Bjizam station is checked and validated by Entura, which is similar as adopted in DPR.
The correlation coefficient between the transposed series at proposed dam site by using the data
gathered from Chendebji and Bjizam gauging stations is 0.96, which shows a very good correlation.
The consistency of discharge data also has been checked and found to be in order.
3.4 Design Flood
The design flood studies have been carried out using empirical approach, deterministic approach and
stochastic approach. The rounded value of peak discharge for Nikachhu catchment at the Dam Site
following hydro-meteorological approach suggested by CWC for zone 2a (CWC, 1991) corresponding
to Standard Project Storm with double bell distribution of storm rainfall has been adopted as the
design flood value, which is 2400 m³/s.
14
Entura’s Observation
Entura reviewed the design flood calculation and found it in order.
Alternatively, design flood studies by using the standard project flood adopted for Mangdechhu
Hydropower project has also been carried out to ascertain the reasonableness of the flood value.
Considering permanent snow line at 5000 m above mean sea level, the rain fed catchment area of
Mangdechhu and Nikachhu are 1097km² and 373km² respectively. Transferring flood on the basis of
catchment area following Dicken’s formula, the standard project flood at Nikachhu dam site works
out to 2100m³/s, which is in close approximation to the design flood value adopted for Nikachhu.
3.5 Sedimentation
The intermittent sediment observation was carried out on Nikachhu River which indicates an average
concentration of suspended sediment during a period of September 2009 to July 2013 varying from
1.3 ppm to 9213 ppm.
The proposed desilting chamber are designed to exclude particles of size 0.2mm and above is
considered adequate to minimize the abrasion of the electro-mechanical parts.
The sediment management can be implemented, by following plant operating rule such as shutting
down the plant when sediment concentration in the river exceeds certain limit considered adequate
and operating reservoir at MDDL during monsoon season.
15
4. Review of Power Potential

4.1 Introduction
The power potential studies available in detailed project report of Nikachhu Hydropower project
have been reviewed and an assessment carried out to validate the energy generation.
4.2 As per Detailed Project Report
The following parameters have been adopted in detailed project report for carrying out power
potential studies:-
 Full Reservoir Level = El 2292 m
 Minimum Draw Down Level = El 2283.8 m
 Centre Line of Turbine Axis = El 1755.75 m
 Maximum Gross Head under Operating Condition = 536.25 m
 Minimum Gross Head under Operating Condition = 528.05 m
 Head Loss under Full Plant Load = 11.65 m
 Head Loss under one unit running = 3.26 m
 Maximum Net Head = 532.99 m
 Minimum Net Head = 516.40 m
 Average weighted Head = 527.5 m
 Turbine Efficiency = 91.5 %
 Generator Efficiency = 98 %
 Design Energy = 491.52 MU
 Installed Capacity = 118 MW
 Environment Flow = 0.554 m3/s
4.3 Entura’s Observation
The 90% dependable year i.e. 1993-1994 used for power potential studies in the detailed project
report was validated and found to be in order. Entura carried out an independent assessment to
validate the energy generation based on the following given inputs:
16
4.3.1 Inputs as derived from the signed contracts
 10 daily discharge series as per detailed project report.

 η = Overall efficiency of generating unit, 91.38% (Turbine and generator efficiencies as per the
Electro Mechanical suppliers guaranteed technical particulars are 92.5% and 98.79%
respectively )
 Environmental flow = 0.554 m3/s as per the environmental clearance and approved TEC.
 Maximum permitted head loss as per the civil EPC contract =13.30 m
4.3.2 Head for Power Generation
 Full Reservoir Level = El 2292 m

 Minimum Draw Down Level = El 2283.8 m
 Centre Line of Turbine Axis = El 1755.75 m
 Head Loss = 13.30 m
 Rated Head = MDDL + 2/3 ( FRL-MDDL)-HL-CL of TURBINE
= 520.22 m
4.3.3 Computation of Energy
As per the inputs obtained from signed contracts, the annual energy generation for 90% dependable
year (with 95% machine availability) is presented in Table 4 .1. The annual energy and plant load
factor works out to be 493.29 MU and 47.72% respectively.
However, as per DPR input parameters, the annual energy and plant load factor is 491.52 MU and
47.55% respectively. Entura has independently verified the annual energy and plant load factor and
found them to be in order.
17
Table 4.1: Power Potential Study of 90% Dependable year 1993-1994
POWER POTENTIAL STUDY OF 90% Dependable year 1993-1994

PERIOD Day 90% POWER IN MW ENERGY IN GWh ENERGY
DEPENDABLE GENERATION IN
s
FLOW Gwh WITH 95%
(CUMEC) M/c
UNRESTRICTED RESTRICTED TO UNRESTRICTED RESTRICTED AVAILABILITY AT
118 MW TO 118 MW 118 MW
Jun I 10 14.35 66.90 66.90 16.06 16.06 16.06
II 10 18.72 87.28 87.28 20.95 20.95 20.95
III 10 22.90 106.78 106.78 25.63 25.63 25.63
Jul I 10 19.84 92.54 92.54 22.21 22.21 22.21
II 10 22.13 103.20 103.20 24.77 24.77 24.77
III 11 24.92 116.22 116.22 30.68 30.68 29.59
Aug I 10 36.78 171.51 118.00 41.16 28.32 26.90
II 10 31.75 148.06 118.00 35.54 28.32 26.90
III 11 31.32 146.06 118.00 38.56 31.15 29.59
Sep I 10 25.89 120.75 118.00 28.98 28.32 26.90
II 10 20.33 94.79 94.79 22.75 22.75 22.75
III 10 21.02 98.04 98.04 23.53 23.53 23.53
Oct I 10 16.94 79.00 79.00 18.96 18.96 18.96
II 10 15.17 70.73 70.73 16.98 16.98 16.98
III 11 11.52 53.70 53.70 14.18 14.18 14.18
Nov I 10 8.70 40.59 40.59 9.74 9.74 9.74
II 10 7.61 35.48 35.48 8.52 8.52 8.52
III 10 6.85 31.96 31.96 7.67 7.67 7.67
Dec I 10 6.03 28.11 28.11 6.75 6.75 6.75
II 10 5.51 25.68 25.68 6.16 6.16 6.16
III 11 4.98 23.23 23.23 6.13 6.13 6.13
Jan I 10 4.56 21.29 21.29 5.11 5.11 5.11
II 10 4.79 22.32 22.32 5.36 5.36 5.36
III 11 4.75 22.15 22.15 5.85 5.85 5.85
Feb I 10 4.32 20.14 20.14 4.83 4.83 4.83
II 10 4.43 20.67 20.67 4.96 4.96 4.96
III 8 4.29 19.99 19.99 3.84 3.84 3.84
Mar I 10 4.28 19.96 19.96 4.79 4.79 4.79
II 10 5.12 23.89 23.89 5.73 5.73 5.73
III 11 5.21 24.28 24.28 6.41 6.41 6.41
Apr I 10 6.23 29.07 29.07 6.98 6.98 6.98
II 10 5.41 25.24 25.24 6.06 6.06 6.06
III 10 6.69 31.21 31.21 7.49 7.49 7.49
Ma I 10 9.77 45.55 45.55 10.93 10.93 10.93
y
II 10 8.93 41.65 41.65 10.00 10.00 10.00
III 11 11.44 53.33 53.33 14.08 14.08 14.08
Total 528.31 500.18 493.29
LOAD FACTOR 48.39 47.72
18
5. Review of Project components

5.1 General
The Project has been envisaged on Nikachhu River as a run-of-river scheme with diurnal storage of
4 hours. The Project comprises the following components:
 A 38 m high diversion dam at river bed El. 2262 m with FRL at El. 2292 m, to divert water
discharge of 25.45 m3/s
 Two numbers 175 m long, 7.5 m wide and 10.95 m high de-silting chambers to remove particle
size of > 0.2 mm,
 A 12.14 Km long, 4 m diameter concrete lined modified horse shoe shaped head race tunnel to
carry a design discharge of 25.45 m3/s,
 A 57.2 m high 10.5 m finished diameter restricted orifice type underground surge shaft,
 A 932 m long, 3 m diameter circular steel lines pressure shaft bifurcating into 2 no branches,
 A 66.675 m (L) x 19 m (W) x 36.8 m (H) sized underground powerhouse cavern to
accommodate two Pelton turbines (59 MW each) to generate 118 MW of power by utilising
rated head of 516.4 m and 491.52 MU annual energy,
 A Transformer cavern of size 61 m (L) x 14.0 m (W) and 27.1 m (H)
 A tail race tunnel 443 m long 4.0 m diameter
Entura’s Observations
The proposed project layout has been critically examined and is considered to be appropriate. It is
observed that the project components have not undergone any change from DPR to Tender stage.
5.2 River Diversion Works
For the construction of the main dam and appurtenant works, the temporary river diversion is
proposed to be done through diversion tunnel located on the left bank, which is capable of carrying
non-monsoon design flood of 80 m3/s. Two coffer dams - one up-stream and the other down-stream
of the dam axis shall be constructed as rock fill structures before the inlet and beyond the outlet
points of the diversion tunnel to divert the river water during non-monsoon season and keep the
dam working area dry; These coffer dams have been planned to renovate every year after the
monsoons.
Diversion flood carrying capacity is decided based on IS: 14815 and overtopping is allowed on partly
constructed works of the concrete dam during monsoon period.
Coffer dams have been planned on riverine materials and seepage will be a concern, hence to restrict
seepage jet grouting has been envisaged, which is supposed to be extended down to available rock.
19
Furthermore, de-watering arrangement of required pump capacity is to be planned. These concerns

lie on Contractor’s perspective and the risk is covered.
5.3 Diversion Dam
It is proposed to construct a gravity type concrete dam, 38 m high on Nikachhu River to divert 32.19
m3/s of discharge. Out of this discharge, 6.75 m 3/s is the combined volume meant for overloading
and flushing of sediments through the de-silting arrangement. With a view to found the dam on
sound rock, the foundation of the dam shall be taken to rock bed level of the river. The dam consists
of 7 blocks. The first two blocks on the left bank are non over flow (NOF), followed by three overflow
blocks of orifice type (with breast wall) spillways. Block number 6 has a high level (without breast
wall) spillway meant to provide safe passage to floating debris and block 7 located on right bank is
non over flow (NOF) block.
Three numbers of gated spillways of 7 m (w) × 11 m (H) with breast wall (crest level 2270 m) and 1 no
of high level spillway are provided to pass a design flood (SPF) of 2400 m 3/s. Considering one gate as
inoperative, a discharge of 2161.3 m3/s (90% of design flood) can pass through two spillways with full
gate open and water level at El. 2292 m (FRL). Rest of the flood shall be passed over high level
spillway i.e. overflow type spillway without any breast wall. The crest level of the high level spillway
has been kept at El. 2283.50 m and with a crest length of 7.0 m, shall be capable of passing
263.34 m3/s with full gate open and water level at FRL.
The flood passing capacity of overflow section has been checked and found in order.
From the geology and geotechnical perspective it is observed that the headworks area has been
investigated with adequate number of drill holes. Altogether, 14 numbers of drillholes had been
carried out at different stages of investigation to portrait the geological and geotechnical scenario of
the headworks area. These appear to be sufficient to interpret the sub surface geological condition
beneath the dam foundation. However, it is found that only one drift has been carried out on left
abutment of the dam to investigate and delineate the stripping limit laterally. There is no
investigation drift on right bank exposed rock and no in-situ testing to identify shear parameters have
been carried out. It intends to believe that design parameters will be taken from laboratory test
results and the stripping limit on right abutment has been considered based on drilling data, which
could be judiciously considered. Although, risk is very low in this case and lie with the Contractor,
however, prior to detail engineering it would be prudent to gather those parameters.
From surface and sub-surface geology it is found that heterogenous rock mass is present at the dam
foundation. Garnetiferous mica schist is encountered on left abutment and schistose gneiss on right
abutment. The rock mass is associated with numerous quartz vein and pegmatite intrusive and
number of small shear seams have also been encountered in drill holes as well as in the excavated
drift. Keeping in view the subsurface geological condition, it is apprehended that foundation
treatment for dam in the form of dental treatment along weak shear seams and pegmatite veins as
well as consolidation grouting of the foundation strata to make it homogeneous and monolithic will
be required. The tender document discretely covers the foundation condition and also indicates
about the necessary foundation treatment with deepest foundation at El. 2257 m, i.e. removal of 4
to 5m of riverine material in river section will be involved to construct dam in sound foundation.
20
5.4 Intake Structure
The intake structure is proposed on the left bank at about 20 m upstream of the dam with
invert level at El. 2275 m i.e. 5 m above the spillway crest level. The left bank is covered by thick
overburden material comprising angular boulders, pebbles in silty matrix. The thickness of
overburden is delineated through a drill hole as about 28m. The intake has been designed to handle
a discharge of 32.19 m3/s (25.45 m3/s of design discharge, plus 10% of overloading and 15% of
flushing discharge). Inclined trash rack with mechanical cleaning arrangement has been proposed.
The size of intake has been checked and found adequate to carry the design discharge. As the
thickness of overburden is considerable at intake portal site, huge excavation and slope stability
treatment may be required. Keeping this in mind, slight readjustment of intake portal could be done
as proposed by Contractor to push the location towards hill and close to dam but not disturbing the
hydraulics. The finalisation of structure will be certainly decided based on negotiable understanding
between Contractor and Developer and the risk will remain with the Contractor on the agreed
design.
5.5 Desilting arrangement
Two nos. 7.5 m wide de-silting chambers with height of 10.95 m and length of 175 m are proposed to
remove particles having size greater than or equal to 0.2 mm. A 20 m upstream transition has been
provided to reduce the velocity of water gradually in the chamber to 0.25 m/s. The chambers have
been provided with 1.5 m wide central gutter to facilitate the flushing of settled silt particles through
the silt flushing tunnel. Separate silt flushing tunnel at the end of each chamber shall join to form
single silt flushing D-shaped tunnel of 2 m (W) and 2.5 m (H), 294.0 m long, and it shall finally
discharge the sediment back into the river downstream of the dam. Thus practically silt free water
shall be conveyed into the headrace tunnel. The flow velocity in the combined flushing conduit will
be more than 3.0 m/s.
From the geological perspective it is observed that the underground desiltng area is investigated
through four drill holes and one drift. The geology of the area is well depicted based on the data
gathered from drill hole and drifting. The sub-surface data indicates presence of many small shears in
the garnetiferous mica schist rock mass at desilting area, which is of poor quality. This geological
scenario is also well depicted in the document and suggestion of excavation methodology and
concurrent support installation with excavation has also been hinted in the document.
Entura carried out an analysis and found that two chambers of 120 m length 10.95 m height and 7.5
m width are adequate for eliminating the sediment particles size greater than or equal to 0.2 mm.
Therefore, the sizing of de-silting chamber proposed in the DPR and Tender can be further optimized.
This can be confirmed by conducting hydraulic model studies of the de-silting chamber.
The flow velocity in the combined flushing conduit will be more than 3.0 m/s which is considered
adequate to keep it free from sediment deposit.
21
5.6 Head race tunnel (HRT)
A 4m diameter finished head race tunnel has been envisaged on the left bank of Nikachhu river
which is 12144.90m long. The tunnel is proposed as modified horse shoe shaped.
The left bank area of Nikachhu river is rugged and traversed by many tributary mountain streams and
gullies which are to be negotiated by HRT. As the prevalent rock type in the area is Thimphu Group
of rock, it is expected that HRT will encounter varieties of gneissic rock, schists, pegmatites,
mylonites, schistose gneiss and granite rock mass. Rock mass is traversed by three prominent sets of
joints. The whole rock mass undergoes weathering impact at different degree and is expected to be
affected by many small shears at many places.
The size of HRT has been checked and found adequate to carry the design discharge of 25.45 m 3/s.
The maximum flow velocity in the tunnel is 1.95 m/s and is within the prescribed limit.
The super incumbent cover over HRT is nowhere less than 100m and is considered adequate. The
maximum ground cover is about 620m which is considered high. So between RDs 11200m and
12000m, where ground cover is considered high, possibility of high stress may impact tunnelling
thereby resulting in rock spalling and rock bursting and hence prior precautionary measures and
preparedness to cope with any adverse situation and eventuality must be planned and considered in
construction schedule.
Based on the surface and interpretative subsurface geology from drilling data, the rock mass classes
have been classified in the document, which slightly differs from Entura’s assessment. The overall
distribution of rock mass along HRT has been given in the below table.
Table 5.2: Percentage of rockmass class along HRT
Rockmass Class Percentage (%)

Given in Tender Document Interpreted by Entura
I 13 -
II 38 24
III 26 52
IV 15 16
V 08 08
22
An attempt was made to re-assess different rock classes to be encountered along HRT based on
available limited data for the long tunnel and may vary. The estimation was made based on the rock
type, structural attitude, laboratory test results, drilling data interpretation and interpretative litho-
boundary as given in different parts of the tender documents. According to rock mass evaluation by
Entura, no rock mass of class I category will be encountered and class III rock will be encountered in
most cases. Class II rock has also been assessed as 24% in place of 38% indicated in the tender
document. So, these slight variations in rock mass class may impact on price variation due to change
in support system to be provided in each class. However, variation of cost based on actual rock class
encountered during execution has been considered as per contract. If any dispute arises between
site geologists (Employer & Contractor) for interpreting rock classes, the decision of Employer’s
geologist will be considered as per contract.
To facilitate construction of 12144.9 m long HRT five intermediate adits are proposed along the
alignment of HRT for excavation of tunnel from de-silting chamber to surge shaft. The maximum
length of HRT between two adits has been limited to 3.0 km. Each adit is D-shaped of 5m diameter.
The length of adits varies from 510 m to 1066 m.The details of adits are given below with expected
rock mass class to be encountered. The rock classes along adits have been estimated tentatively
based on limited surface and subsurface geology given in the tender document. Hence it may vary
during actual execution.
Adits Length in meter Rock type Tentative rock mass class

Adit 1 510 Granitic gneiss 20% class II & 80% class III
Adit 2 831 Granitic gneiss 50% Class II, 50% class III
Adit 3 523 Granitic gneiss 10% class II, 75% class III & 15%
class IV
Adit 4 694 Garnetiferous mica schist 20% class II 70% class III & 10%
class IV
Adit 5 1066 Granitic gneiss 40% class II, 57% class III & 3%
class IV
It is also important to mention that the portal of adit 5 is not located on rock and hence development
of portal for this adit will require some open excavation to establish rock and slope protection above
adit portal may require more effort to stabilize overburden materials.
5.7 Surge Shaft
A 10.5 m diameter, 57.2 m high underground surge shaft with a restricted orifice has been proposed
at the end of HRT.
Entura carried out surge analysis and found that proposed surge shaft diameter of 10.5 m with
restricted office is in order under both upsurge and down surge conditions.
23
Geologically, the area around surge shaft is covered by slope wash deposits. However the drilling
data reveals that depth of overburden in the area is in the tune of 42 m and the rock type
encountered is garnetiferous granitic gneiss with schist partings and pegmatite veins. The rock cover
over surge shaft appears to be less and rock condition towards upper part would be of poor quality,
however, the rock quality becomes gradually better towards bottom of surge shaft. However, the
poor rock condition along surge shaft has been well captured and projected in the document and
necessary measures have also been hinted accordingly. Thus no major risk is involved.
5.8 Pressure Shaft Tunnels
A 3 m diameter steel lined pressure shaft is proposed from the surge shaft to powerhouse. The
pressure shaft initially runs horizontal for a length of about 258 m and then drop down with an
inclination angle of 50 degrees for approximate length of 630 m. Pressure shaft bifurcates into two
unit pressure shafts each of 2.1 m diameter near the powerhouse.
An intermediate adit is proposed at the middle of the inclined portion of pressure shaft for ease in
construction.
The size of pressure shaft has been checked and found adequate to carry the design discharge.
Geologically, pressure shaft will be excavated through garnetiferous/granitic gneiss associated with
pegmatite intrusive. As the rock mass is heterogeneous and various litho- contacts are expected,
shearing along the litho-contacts may encounter and hence preparedness for advancement while
construction should be in place and is well documented in tenders.
5.9 Power house
An underground powerhouse is envisaged on the left bank of the river Nikachhu. The size of
powerhouse cavern is 66.675m (L) x 19m (W) x 36.8m (H) to accommodate two Pelton units of 59
MW each. The transformer hall (61.0 m long, 14.0 m wide and 27.1 m high) is located downstream of
the powerhouse complex.
The size of powerhouse has been checked and found adequate to accommodate two machine of 59
MW each.
The rock type around powerhouse area is granitic gneiss. The area was probed by one drift at
powerhouse cavern and the 3 D geological log has been prepared which shows good to very good
rock. The rockmass is traversed by three major joint sets which are tight, rough with low persistence.
Foliation of the rock dips 31⁰ towards 110⁰. In-situ hydrofracture test and shear test has been carried
out at powerhouse drift. The stress measurement through hydrofracture test at powerhouse drift
indicates maximum principal direction is N 60⁰. Based on the rock attitude and principal stress
direction the long axis of powerhouse has been kept in N218⁰ direction, which is satisfactory. As
such requisite investigations and testing has been undertaken in powerhouse area and the geology
is well projected in the document.
24
5.10 Electro-mechanical equipment
Nikachhu hydropower project envisages an underground powerhouse with two units of 59 MW with
continuous overloading of 10% operating at design / weighted average net head of 520.22 m &
discharge of 12.725 m3/s. The type of turbine selected is Vertical Pelton turbine with 4 jets, rated
speed 375 rpm, maximum continuous output 66224 kW, guaranteed weighted average efficiency of
92.5% at rated net head 520.22 m. Guaranteed weighted average efficiency of Generator has been
stated as 98.79 %. Design Runaway speed is 669 rpm.
Close loop cooling water system has been considered.
EOT cranes for Power House 150/30T double girder, for GIS 5T single girder & for Butterfly Valve 35 T
single girder have been considered.
 Selection of the type of turbine has been reviewed considering the net head of 520.22 m (head
range 300 m and above), specific speed & possibility of obtaining minimum output for
continuous operation in this case as per Clause numbers 5.1, 5.2 and 5.3 of IS: 12837 and the
selection of Vertical Pelton Turbine is found to be most suitable.
 Runner setting of 3.5 m above the maximum Tail water level is found to be in order.
 Selection of 4 nos. of jets per turbine is the most appropriate.
 Speed selection of 375 rpm reviewed and found to be in order.
 As per the publication of CEA titled as “Best Practices in Power Generation of Central Electricity
Authority (CEA)”, Spherical valve is to be used in case of head of 200m & above. The type of
MIV for this range of operating head shall be spherical type, as the head is more than 200 m. In
case of Nkachhu hydropower project, selection of Spherical valve for MIV is in order.
 As the head for Penstock Protection Valve is 60m, Butterfly type of valve has been selected &
the selection of PPV as Butterfly valve is in order.
 The first critical speed or whirling frequency of the shaft system (turbine-generator) shall be
more than the 125% of the turbine runaway speed. Critical speed for combined Turbine and
generator has been stated as 840.5. Runaway speed < 664 rpm. Accordingly the critical speed
is in order.
 The maximum noise level at a distance of 1m at rated operation not to exceed 85 dB is
acceptable.
 Momentary rise in speed on sudden reduction of load to zero from full load, 3/4 th load, ½ load,
1/4th load < 20% of rated speed is acceptable.
 While reviewing the Makes of various systems/components, it is observed that EQUIVALENT
has been mentioned as an alternative make. Due care is required during detailed engineering
while agreeing for the Equivalent make.
 Guaranteed maximum rated output of Generator should be 65.56 MVA & Continuous overload
capacity should be 72.11 MVA. At Item 2.2, Clause 3.1.1 of contract document, the units is in
kVA needs to be corrected to MVA.
 Flywheel effect of Generator (GD 2 value) has been considered as 965 tm2 and Inertia Constant
is 3.0. Both the parameters are in order.
25
 Weight of heaviest part of generator to be lifted by EOT Crane is 123 MT. The crane capacity in
the Power House is 150/30 T. The capacity of EOT Crane is in order.
5.11 Tailrace tunnel
The tail race tunnel consists of two individual discharge tunnels each of size 3.2 m (w) x 3.2 m (h) D-
shaped merging into a single D-shaped tunnel of size 4.0 m (w) x 4.0 m (h), which discharges the
water back to the Mangdechhu reservoir. Single TRT has been designed to carry a discharge
of 25.45 m3/s with a slope of 1 in 750. The length of unit 1 and unit 2 TRT is 96.0 & 93.0 m
respectively. The water from the powerhouse will be carried to the Mangdechhu River through a
single TRT of length 443.0 m. The TRTs have been designed as free flow. The unit tail race tunnels
have been provided with vertical lift gates for isolation & maintenance purpose. These gates shall be
operated from the transformer cavern.
Tailrace tunnel outfall level has been kept at El. 1749.5 m which is about 1.5 m higher than the FRL of
Mangdechhu reservoir.
The size of tailrace tunnel has been checked and found adequate to carry the discharge back into
river.
5.12 Head loss
The full reservoir and minimum draw down levels will be at El. 2292 m & 2283.80 m respectively. The
centreline of turbine is kept at El. 1755.75 m. Total head losses in the water conductor system is
11.65 m.
The preliminary head loss calculation has been carried out by Entura and found that head loss
provided in the DPR and Tender is in order. However, as per the civil EPC contract maximum head
loss of 13.30 m is permissible to the civil contractor.
5.13 Power evacuation
Power is proposed to be evacuated through a 132 kV double circuit overhead transmission line to
interconnect to 400/132 kV, 200 MVA ICT station provided at Mangdechhu hydropower project
Pothead yard. Further evacuation to Indian border from Mangdechhu hydropower project shall be
along Mangdechhu transmission system. The estimated length of the transmission line from
Nikachhu hydropower project powerhouse to Mangdechhu hydropower project pothead yard is
about 18.6 km.
Entura’ observations
 Power evacuation from Pothead yard of Nikachhu hydropower project to Pothead yard of
Mangdechhu hydropower project was reviewed and the 132 kV double circuit overhead
transmission line found to be adequate.
 Preliminary survey of transmission line (through BPC) has been carried out and MoU has been
signed with BPC for construction of 132 kV double circuit transmission line. The MoU entered
26
into between THyE and BPC has been reviewed and observation made at section 6.4 of this
report.
 Valid Environmental clearance is available for the construction of 18.6 km 132 kV transmission
line to evacuate power from Nikachhu Hydropower Project from its Pot Head Yard to
Mangdechhu Pot Head Yard under Trongsa Dzongkhag.
 Right of Way for transmission lines upto 27 m is available as per environmental clearance
letter.
 The No objection certificate of BPC has suggested using ACSR Zebra conductor in place of ACSR
Kundah conductor for evacuation of power through double circuit to avoid redesigning &
availability of standard towers with them. However, in view of Entura, either can serve the
purpose. During detailed Engineering the same can be reviewed by Owner’s consultant.
 As per the Power Purchase Agreement between PTC India Limited and THyE, THyE shall be
responsible at its cost and expense for the delivery of the Power at the Delivery Point. All
transmission charges, transmission losses and operation charges applicable up to Delivery
point shall be borne by the Seller. The Seller shall coordinate with BPC up to the Delivery Point
to ensure that the facilities at the interconnection Point are tested & commissioned prior to
the Scheduled Synchronisation Date and such facilities are maintained in accordance with
Prudent Utility Practices during the Terms of Agreement by the Seller. The seller shall ensure at
all times that Delivered Energy would be made available to the Procurer at the delivery point.
Above provision in PPA seems to be adequate.
27
6. Review of Contracts
6.1 Introduction
The project is being implemented through the following contracts:

 Main Contract Package, MP – 1 (Civil and Hydro – Mechanical Works) - EPC contract awarded
to M/s Hindustan Construction Company Limited (HCC)
 Main Contract Package, MP – 2 (Electro - mechanical Works) - EPC contract awarded to M/s
Voith Hydro Private Limited, India (Voith)
 Transmission Line works – MoU signed between THyE and Bhutan Power Company (BPC)
 Owner’s Engineer Contract – SMEC India Private Limited (SMEC)
The chart presented below shows the structure of the contracts for consultancy and implementation
with the developer (Tangsibji Hydro Energy Limited - THyE).
28
6.2 Review of Main Contract Package, MP – 1 (Civil and Hydro – Mechanical Works)
The EPC contract for the main package, MP-1 was signed on 20 th April, 2016 between M/s Tangsibji
Hydro Energy Limited and M/s Hindustan Construction Company Limited. The main findings from the
contract and Entura’s comments are enumerated below:
6.2.1 Scope of work
The Scope of work for the EPC contractor is given below:
 The Planning, Design & Engineering of civil works;
 Balance Infrastructural Works like roads, bridges and construction facilities
 Construction/Execution of Main Civil Works including supply of labour, construction material

and equipment;
 Design, Manufacture and Supply of Hydro Mechanical works
 Storage, Erection, Testing and successful Commissioning of the project
 Remedy of any defects appearing during the defect liability period
The above contract has been examined in view of technical suitability and completeness. In addition
to the above works, all deemed temporary works required for the project will be done by EPC
contractor.
It is found that the contract adequately covers all the necessary components, equipment, services
along with spares required for completion and commissioning of the project. The requirements have
been clearly and comprehensively spelled out giving minute details for all civil structures and hydro-
mechanical components.
As per the contract agreement, additional scope for development of pooling bays at Mangdechhu
HEP pothead yard, THyE will review the scope of civil work lying with HCC. In case THyE desires to get
it executed by M/s HCC, the same may be negotiated accordingly.
6.2.2 Subcontractors
M/s HCC has proposed the following subcontractors for the Design and Analysis of Civil Components
and for Key Activities in Hydro-Mechanical Works. M/s HCC can still propose other Sub Contractors
but subject to the approval of THyE.
Proposed subcontractors for the Design and Analysis of Civil Components:

 AF-Consult Switzerland Ltd., Switzerland
 Indo-Canadian Consultancy Services Ltd., India
Proposed subcontractors for Hydro Mechanical works:

 Precision lnfratech Ltd., India
 PES Engineers Pvt. Ltd., India
29
 ATB RIVA CALZONI S.P.A.
The credentials of the sub-contractors had been reviewed by THyE and found suitably qualified
except ATB. Entura has also reviewed the sub-contractors detail qualifications and considered
suitable for the role.
6.2.3 Commencement Date
As per the contract, the commencement date will be later of the following:
 On execution of contract Agreement (contract signed on 20 th April, 2016)
 Receipt of Performance security (Performance security received on 19 th April, 2016)
Based on the above commencement date is 20 th April, 2016.
6.2.4 Completion & commissioning date
The entire works shall be completed within 1,460 consecutive calendar days from the
Commencement date. Based on this, unit wise commissioning and completion dates are as below:
 Commissioning of Unit -1 shall be 1,400 consecutive calendar days from the Commencement
Date i.e. first unit shall be commissioned by January, 2020.
Date i.e. first second shall be commissioned by February, 2020.
 Completion date shall be March, 2020.
6.2.5 Contract price and its reasonability
6.2.5.1 Contract price
The Contract Price is the aggregate of: INR 4,288,930,334.69 (Indian Rupees Four Billion Two
Hundred Eighty Eight Million Nine Hundred Thirty Thousand Three Hundred Thirty Four and Paisa
Sixty Nine) and Euro 3,827,196.98 (Euro Three Million Eight Hundred Twenty Seven Thousand One
Hundred Ninety Six and Cents Ninety Eight) only.
6.2.5.2 Customs duties, taxation & royalty
All goods imported by the contractor into the country for direct use for the works of project are liable
to be exempted from customs & other import duties and taxes, after obtaining employer's prior
written approval for import. The employer shall endorse the necessary exemption of documents
prepared by the contractor for presentation in order to clear the goods through customs.
The bid price is inclusive of all custom and other duties, levies, taxes, etc. outside the employer's
country.
6.2.5.3 Reasonability of prices
The reasonableness of civil and hydro-mechanical contract price was carried out based on the
quantities and item rates for civil contracts. The major quantities were reviewed and the item rates
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were compared with the prevalent rates available with Entura and approved DPR. Based on the
above analysis it was found that the contract price for civil and hydro-mechanical works is
reasonable.
6.2.6 Price Adjustments
The Contract Price is of fixed and lump-sum nature for the entire scope of work and is subject to
limited price adjustments because of the following:
 The contract price shall be adjusted to take into account of any increase or decrease in cost
resulting from a change in the laws of country. However, adjustment for changes in legislation
shall be applicable only if the changes in the laws of the country are statutory.
 The adjustment for the changes in the cost shall be made and payable to the contractor on
account of changes in the cost of labour, cement, steel, fuel, and lubricants and other
materials as specified in the contract agreement.
Entura finds the above conditions reasonable and well drafted.
6.2.7 Price Variations
As per the contract the price variations are permissible for the following conditions:
Geological aspect:
 The price variation due to geological surprises is allowed in case of difference between the
interpreted geology in the GBR and actual encountered geology in the HRT and Adits.
However, as per contract agreement no price variation due to geological aspect is permitted
for the dam and powerhouse area.
 Variations arising out of Cave-Ins have also been restricted to rock class – V encountered in
HRT and adits.
Value Engineering:
 The contractor shall study and evaluate the value engineering proposal at its own cost. The
overall responsibility, safety and suitability of the works shall be lying with the contractor, if
such proposal as requested by the employer is agreed by the contractor and vice-versa.
 As per the contract agreement, if there is any change in price due to value engineering, both
parties (employer & contractor) shall mutually agree for adjustment in the contract price for its
outcome.
Entura is in view that these conditions are reasonable and well drafted.
6.2.8 Defects notification period
The Defect Liability Period is 1095 days and will commence after completion/ commissioning of units
i.e. from the date of issue of Certificate of Completion and is as per the prevalent market practices.
If during the Defect Liability Period any part of the Works is found defective or deficient in any
manner and is repaired/rectified/ replaced pursuant to the Defects Liability provisions of the
Contract, the Defect Liability Notification period for such portion of the Works shall, not
withstanding, anything to the contrary contained herein, be operative for a further period of 12
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months from the date of such repair/ rectification/replacement but shall not in any case be operative
for more than 1,095 consecutive calendar days from the date of completion stated in the
corresponding Certificates of Completion.
In view of Entura, above conditions are quite reasonable and well drafted.
6.2.9 Damages for delay
The damages for delay in completion of project are 0.07% of the Contract Price in respect of the
Works, payable (per day) in the proportions of currencies in which the Contract Price is payable.
For each Part of Works, such daily sum shall be 0.07% of the final contract value of such payable (per
day) in such currencies. The maximum amount of delay damages shall be 10% (Ten percent) of the
Contract Price stated in the Contract Agreement.
As per the original schedule, the project is stated to be completed during the lean season (Jan – Feb
2020). As per Entura’s review, the provision of delay damages will eventually compensate for the
generation loss on account of delay. However, it should be noted that damages do not always
compensate for the total financial loss, as there is a trade-off between the value of damages
available under a project contract, and the contract price is to be paid. In addition, the size of the
contract and the total amount of return available to a party will limit that party’s ability to accept
liabilities.
Entura finds these in order and comparable with market standards.
6.2.10 Extension of time
The Contractor shall not be eligible to claim for Extension of Time for Completion of Works if the
overall variation is within the 20% of the Contract Price.
6.2.11 Retention money
As per the contract agreement, retention money is 10% (Ten percent) of the total amount of each
interim payment after deduction of advance payment recovery in each of the respective currency
portion. Limit of retention money is 10% of the contract price.
6.2.12 Governing Laws and Arbitration
Governing Law is the Law of the Kingdom of Bhutan and Place of arbitration is Singapore.
6.2.13 Functional Review of works
The specifications for civil and hydro-mechanical works have been critically examined based on the
Technical Specifications. It is observed that the technical specifications are very comprehensive and
cover all technical aspects of all components in great detail. Accordingly, the technical specifications
for the project works are considered in order.
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6.3 Review of Main Contract Package, MP – 2 (Electro – Mechanical Works)
Contracts for “Supply of Main Contract Package MP-2 (Electro-Mechanical Works) i.e. Complete
Design, Manufacture and Supply of Plant and Mandatory Spare Parts” & for “installation, erection
and testing, completion including insurance, storage efficiency testing, and training charges,
commissioning of certain facilities” of 118 MW Nikachhu Hydropower Project were signed on 30 th
December, 2015 between M/s Tangsibji Hydro Energy Limited and M/s Voith Hydro Private Limited.
The main findings from the contract and Entura’s comments are enumerated below:
6.3.1 Scope of work
Scope of Works related to EM under Supply Contract for Main Contract Package, MP-2:
CIP Entry Boarder Point / CIF Indian Port of Entry Supply of all the Plant and Equipment (including
Type Testing as per technical requirement) and Mandatory Spare Parts from within India or outside
India related to Electro-Mechanical Works/ Facilities of 118 MW Nikachhu Hydropower Project,
Trongsa, Bhutan as per Contract.
Scope of Works related to EM under Service Contract for Main Contract Package, MP-2
Port Handling and Custom clearance of imported goods, loading, inland transportation for delivery at
site, insurance, unloading, storage, preservation, handling at site, installation, testing and
commissioning including performance testing and training in respect of all Plant and Equipment
supplied under “First Contract” and “Second Contract” and any other services specified in the
contract document.
It is found that the contract adequately covers all the necessary components, equipment, services
along with spares required for completion and commissioning of the project. The requirements have
been clearly and comprehensively spelled out giving minute details for all Electro-mechanical
components.
6.3.2 Subcontractors
M/s Voith & THyE have mutually agreed for selection of subcontractors to supply of major items of
Plants & services. The same has been reviewed and found in order. For any additional item, no
Subcontracts shall be placed until the Subcontractors have been approved in writing by the
Employer.
As per the contract, the commencement date will be later of the following:
 On execution of contract Agreement (contract signed on 30 th December, 2015);
 Receipt of Performance security (Performance security received on 12 th December, 2015);
 The employer has paid the Contractor the advance payment;
Entura’s Observation:
As per the information provided by the client, THyE has released 10% advance payment to M/s Voith
and the same has been received by the firm on January 19, 2016. From the schedule it is gathered
that the duration of Contract is 1430 days.
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In the absence of the commencement date of EM works, we need to consider the commissioning
date agreed by the Employer in the Contract MP-1 for Civil & HM works for execution of the Project.
The entire works shall be completed within 1,460 consecutive calendar days from the
Commencement date. Based on this, unit wise commissioning and completion dates are as below:
Date i.e. first unit shall be commissioned by January, 2020.
Date i.e. second unit shall be commissioned by February, 2020.
 Completion date shall be March, 2020.
Entura in its draft report had suggested for the alignment of MP2 schedule with MP1 schedule. THyE
clarified that the contract period is aligned for MP-2 in line with MP-1 schedule to match the Key
Dates as per the integrated schedule.
A contract agreement was entered on 30th day of December 2015 between M/S Tangsibji Hydro
Energy Limited, Bhutan (hereinafter called “the Employer”) & M/S Voith Hydro Private Limited
(hereinafter called “the Contractor) for complete design, manufacture and supply of complete
facilities viz. 118 MW Nikachhu Hydro Power Project, Trongsa, Bhutan (“the Facilities”) on basis of
Engineering-Procurement-Construction (EPC) at a Lump sum contract price of US Dollars Ninteen
Million Six Hundred Four Thousand Eight Hundred and Ninety Six only (US $ 19,604,896).
Similarly another contract was entered on 30th day of December 2015 between M/S Tangsibji Hydro
Energy Limited, Bhutan (hereinafter called “the Employer”) & M/S Voith Hydro Private Limited
(hereinafter called “the Contractor) for installation, erection, testing, completion including insurance,
storage, efficiency testing & training & commissioning of complete facilities viz. 118 MW Nikachhu
Hydro Power Project, Trongsa, Bhutan (“the Facilities”) on basis of Engineering-Procurement-
Construction (EPC) at a Lump sum contract price of US Dollars Four Million One Hundred Sixty Eight
Thousand Six Hundred and Thirty Two only (US $ 4,168,632).
The tax deducted at source (TDS) levied by the Royal Government of Bhutan (RGoB) as applicable on
value of the Contract shall be borne by M/s Voith.
THyE shall arrange certificate for such deduction for RGoB and provide to M/s Voith to enable it to
take suitable credit/ refund in India under Double Taxation Avoidance Agreement (DTAA) between
Bhutan & India. The withdrawal of DTAA shall be considered as “Change in Law” as per clause 36 of
GCC.
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The reasonableness of Electro-mechanical contract price for Supply & Services was carried out based
on the quantities and item rates for both the EM contracts (for Supply & Services). The major
quantities were reviewed and the item rates were compared with the prevalent rates available with
Entura and approved DPR. Based on the above analysis it was found that the contract price for
Electro-mechanical works is reasonable.
The Contract Price is of fixed and lump-sum nature for the entire Scope of Work and is subject to
limited price adjustments because of the following:
 The contract price shall be adjusted to take into account of any increase or decrease in cost
resulting from a change in the laws of country. However, adjustment for changes in legislation
shall be applicable only if the changes in the laws of the country are statutory.
 The adjustment for the changes in the cost shall be made and payable to the contractor on
account of changes in the cost of labour, cement, steel, fuel, and lubricants and other
materials as specified in the contract agreement.
6.3.7 Price Variations
As per the contract the price variations are permissible for the following conditions:
(a) Supply from Country other than Bhutan & India
i. Labor
ii. Steel
iii. Copper
(b) Supply & Services from Bhutan & India
Entura reviewed the Price Escalation formulas & found the above conditions reasonable and well
drafted.
6.3.8 Defects Liability
The Defect Liability Period, for each Plant & Equipment, shall be 36 months from the date of
scheduled completion of Works/facilities as per Appendix 4 of Contract Agreement or 24 months
from the date of Operational Acceptance of the Facilities or any part of the facilities, whichever is
earlier, unless specified otherwise in the contract.
The defect Liability Period of Spares that is not used within 24 months from the respective dates of
the delivery at site will, however, be subject to condition that all such spares being stored /
maintained /preserved in accordance with Contractor’s Standard recommended practice, if any and
the same has been furnished to the Employer.”
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The extended Defects Notification Period shall be applied only to the relevant parts of the Facilities
where such extension is required.
The period of defect liability in case of repaired/ replaced items shall be 12 months from the date of
repair/replacement of defective items within maximum period of 36 months.
Maximum LD on delay: 10% of the Contract price.
Entura finds this in order and comparable with Indian market standards.
6.3.10 Performance Guarantee
The contractor has submitted the functional guarantees along with guaranteed parameters as per
details sought in Particular Conditions of Contract.
The Contractor has also submitted the rate of damages payable by him for shortfall in actual values
of Output from guaranteed figures during the performance tests.
 Turbine /Generator Output
o For each 0.01% shortfall in Turbine/Generator weighted average efficiency, the rate of
penalty per turbine is Nu 5,12,000.
o For each 0.01% shortfall in Turbine/Generator output from guaranteed maximum value
during the Field Test shall be is Nu 5,12,000 for each turbine.
o The penalty for each fraction of 0.01% shortfall from guaranteed values on pro-rata
basis for efficiency & output for each turbine & total penalty shall be levied for all the
two turbines/generators.
o The employer reserves the right to reject the turbine if the tested values of either
weighted average efficiency or rated output falls short by two (2) percent or more of the
corresponding guaranteed values during Field acceptance tests.
 Step Up Transformers
Penalty shall be applied on the Contractor in case he is unable to achieve
For each kW of excess no load loss after considering tolerance Nu 2,94,000
specified, if any
For each kW of excess load losses after considering tolerance Nu 2,46,000
specified, if any
For each kW of excess auxiliary losses including cooler losses after Nu 2,94,000
considering tolerance specified, if any
 Bus Ducts
o Penalty of Nu 2,46,000 per kW shall be applied on the Contractor in case the losses in
the Bus ducts are found to be higher than the guaranteed loss figures.
 145 kV XLPE Cable
o Penalty of Nu 2,46,000 per kW per km. shall be applied on the Contractor in case the
losses in the 145 kV XLPE cable are found to be higher than the guaranteed loss figures.
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 Total Aggregate Penalty

o Maximum LD on delay : 10% of Contract price
o Maximum LD on Functional guarantees : 100% of Contract price
o Penalty in case of breach of Labour Laws : 5% of Contract price
Overall aggregate penalty (Delay damages, LD & other penalties) shall be 100% of Contract
price.
 Other Guarantees are as under
o Maximum Speed Rise and Pressure Rise
 Speed Rise: Meeting Specification requirement
 Pressure Rise: Meeting Specification requirement
o Strength for Runaway Speed
 The capability of turbine and generator parts to withstand runaway speed for 5
minutes duration continuously without any damage for every occurrence with
cooling water supply ON, is in order and acceptable
o Bearing Temperature
 The maximum temperature of Thrust bearing pad as 85 0C, that of upper & lower
guide bearing as 800C & that of Turbine guide bearing as 70 0C is in order and
acceptable.
 The above penalty provisions on guaranteed parameters are adequate.
 Terms of Payment and Procedure of Payment of Supply Contract at Appendix 1 were reviewed
and found to be reasonable and in order.
6.3.11 Price variation
Price variation in EM Package has been agreed in the Contract in three parts as below:
 Supply from country other than Bhutan and India for variation in Labour, Steel and Copper;
 Supply and services from Bhutan and India for variation in the following for Supply other than
Generator Transformer;
o All India Consumer price index for wages and industrial workers, General Index
base(2001-100) as published in the Indian Labour Journal of “Journal Bureau” by
Ministry of Labour, GoI;
o Wholesale price index for other non-ferrous metals(Base 2004-2005=100) as issued by
Economic Advisor Ministry of Industry, GoI;
o Wholesale Price Index for Ferrous Metals (E&M Supplies) (Base 2004-2005=100) as
issued by Economic Advisor, Ministry of Industry, GoI;
o Wholesale Price Index of all commodities(Base 2004-2005=100) as issued by Economic
Advisor, Ministry of Industry, GoI
 Price Variation for erection, testing and commissioning based on the following;
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o All India Consumer price index for wages and industrial workers, General Index
base(2001-100) as published in the Indian Labour Journal of “Journal Bureau” by
Ministry of Labour, GoI;
o Price of High Speed Diesel at outlet of Indian Oil Corporation nearest to the Project site;
o Wholesale Price Index of Machinery and Machine Tools(Base 2004-2005=100) as issued
by Economic Advisor, Ministry of Industry, GoI
THyE & Voith have also agreed that the Price Adjustment for supply from India and the Price
Adjustment charges for Erection, Testing and commissioning(Services) from India shall be
regulated by freezing the relevant portion of the Contract price to INR by using the Exchange
Rate @ 1 USD = INR 63.65. The Price variation shall be calculated on the INR, and shall be
released on equivalent USD using the RMA Exchange rate prevailing at the time of payment.
The Price Adjustment for supply from outside Bhutan and India shall not be converted to INR,
and shall be denominated and paid in USD.
6.3.12 Governing Laws and Arbitration
Governing Law is the Law of the Kingdom of Bhutan and Place of arbitration is Singapore.
The specifications for Electro-mechanical works have been critically examined based on the Technical
Specifications. It is observed that the technical specifications are very comprehensive and cover all
technical aspects of all components in great detail. Accordingly, the technical specifications for the
project works are considered in order.
6.3.14 Assessment of credentials of contractors
Voith Hydro has a worldwide presence and the company has been engaged in Hydro power business.
Its business is to supply product and provide services which are designed, realized and integrated to
meet the Hydro power customer’s requirements for large hydro, small hydro, rehabilitation/
maintenance and services.
Credentials in respect of Sub-Contractors of major items submitted by Voith, which are part of the
Contract were also reviewed and found to be in order.
6.4 Transmission Line Works
Bhutan Power Corporation Limited (BPC) & Tangsibji Hydro Energy Limited (THyE) have entered into
an MOU for construction of the 132 kV double circuit transmission line from the Pothead yard of
Nikachhu Hydro Power Project to Pothead yard of Mangdechhu Hydro Power Project to evacuate the
118 MW Power generated at Nikachhu Hydro Power Plant before January 2019.
6.4.1 Scope of work
BPC’s scope of work shall include detail and check survey, investigations, design, engineering,
procurement, supply, transportation, insurance, handling, storage and preservation, construction,
testing and commissioning and works incidental thereto whether explicitly specified herein or not for
38
the said Transmission Project. Towards this BPC will engage contractors selected through competitive
bidding process, as per norms of BPC.
It is found that the contract adequately covers all the necessary components, equipment, services for
construction of 132 kV double circuit Transmission Line from Pothead yard of Nikachhu Hydropower
Project to Pothead yard of Mangdechhu Hydro Electric Project.
Commencement date is the receipt of letter from THyE to commence.
As per MOU, the scheduled period of completion for the Transmission Project under the MOU shall
be latest by December 2018, to match the requirement of THyE for Hydroproject commissioning.
As per the information provided by the client a letter has been provided to BPC to go-ahead with
tender preparation works.
The estimated cost of the Transmission line works including associated components of project as
agreed in MoU is Nu. 233.836 Million (based on July 2013 price level).
All taxes and duties within Bhutan i.e. Bhutan Sales Tax (BST) and Custom Duty and / or any other
applicable local/ import duties will be either be exempted by THyE or reimbursed to BPC.
For construction of 132 kV double circuit Transmission line the Cost of Nu. 23.38 Crore considered as
per the MoU signed with BPC in July 2014(2014 Price Level) for 18.6 km against the DPR cost of Nu.
14.31 crore (2013 Price level) estimated for 17 km. This contracted price includes provision towards
contingencies (Nu. 0.6 Crore) and environmental and social costs (Nu. 0.99 Crore) which have been
classified accordingly.
The Contract Price is not fixed and is an estimated amount. The total cost that would be payable to
BPC shall include the following:
 Project cost as per actual executed works by Contractors for the transmission line works by the
Contractor(s) for transmission line works valued at the rates & prices awarded to them;
39
 All other costs associated with the Transmission Project, such as Land compensation for public
and private owners for RoW, crop compensation, compensation towards forest( Environment
Management plan), plantation, any othe associated costs with third parties;
 Any costs associated with any interim fund arrangement warranted to be made by BPC due to
delay in receipt of funds from THyE;
 Establishment and implementation cost of the Transmission Project till handing over to THyE;
 Operation & Maintenance Costs of the works till the same are formally taken over by THyE;
and
 BPC’s charges @ 10% of total of all above costs.
BPC shall incorporate suitably the provisions towards levy of Liquidated damages for delay in
completion of the work in the tender document to be issued to the Contractor.
BPC shall submit on quarterly basis a report on the progress of the work within a month after the end
of each quarter. In addition BPC shall submit monthly status reports to THyE.
Entura’s Observations:
As per the prevalent practice, deposit works for construction of transmission lines are being operated
as in the MoU. For reviews of progress of works, THyE should monitor the progress periodically to
ensure timely commissioning of the transmission line.
6.5 Owners Engineers contract
An agreement has been signed between THyE & SMEC India Pvt. Ltd. for Owner’s Engineers
Consultancy Services at a price of INR 106,321,569.80 on 23/02/2015. The detailed scope of work is
as below.
 Assist THyE in Pre-bid meetings, bid evaluations, negotiations and award of main EPC
contracts;
 Review and recommend for approval of all design and engineering notes/ memos, drawings,
quality assurance plans, testing schedules and results, etc. required for the 118 MW Nikachhu
Hydropower Project;
 Participate in the control and approval of Project activities of the EPC contractors by regular
inspection of Project sites; and inspections as required of workshops, manufacturing and
storage facilities of the Contractors;
 Maintain geological logs of all excavations, particularly underground for the purpose of
determining supports and payments;
 Participate in Project co-ordination meetings and review meetings with contractors,
equipment manufacturers/ Suppliers and vendors as the case may be;
 Participate in the supervision and quality assurance of civil works, hydro steel, electrical &
mechanical components of the project throughout the period;
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 Assist THyE in contracts management including verification/ validation of payments, review of

extra/ deviated claims and time extensions.
The detailed scope of Services of OEC has been reviewed and found to be adequate to assist Owner
to ascertain implementation of the Contract.
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7. Review of PPA
7.1 Introduction
The Power Purchase Agreement was signed between THyE and PTC India Limited on 20 th November
2014 for selling the contracted energy from Nikachhu Hydro Power Project. This section presents the
review of key conditions of PPA.
7.2 Effective Date
The date of commencement of supply of contracted energy in accordance with the provisions of
Agreement is 1st July 2019. However the Seller & Procurer may mutually agree for commencement of
supply of power in a phased manner from revised scheduled delivery date.
As the scheduled completion of the project based on the executed EPC contracts is March 2020,
adequate changes will be required in the PPA.
7.3 Tenure
The PPA has a Term of 25 years commencing from the Scheduled Delivery Date or such extended
period as mutually agreed upon by both Parties.
7.4 Price
For the purpose of payments, the Tariff to be paid to the Seller shall be as per the table provided
below for the applicable Contract year. The tariff post 15 anniversary of scheduled delivery date till
the end of the 16th Contract year will be calculated by escalating the Levelized tariff (INR 4.05/Unit) at
an annual escalation for 2% per annum on a compounded basis for 15 years. Post the 16 th Contract
year the tariff would be escalated at 2% for every year subsequent to the Contract year for the
remaining tenure of PPA. However, post 15 th anniversary of the Scheduled Delivery Date, the parties
will mutually discuss, negotiate and review the above mechanism and may agree with the above
mechanism or arrive at some other tariff for remaining tenure of the PPA.
Contract Commencement date of End date of Contract Quoted Tariff in

Year Contract year year figures (Rs./kWh)
1 Scheduled delivery date 31st December 3.30
2 1st January 31st December 3.40
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7.5 Payment, Payment Terms & Payment Mechanism
The Seller shall issue to the Procurer on or before the 3 rd day of each month, a Monthly bill for
Delivered energy/Deemed Delivered Energy made available by the Seller to the Procurer in the
immediately preceding month.
The Due Date of the payment shall be 10 th day from the receipt of the Monthly Bill, either by
facsimile, e-mail or otherwise (Due Date). The payment of invoice amount for power purchased will
be made by the Procurer through electronic transfer to Designated Account of the Seller in full on or
before Due Date. The Procurer will bear any applicable bank charges for transfer of the payment to
the Designated Account of the Seller.
The Procurer shall provide to the Seller in respect of payment of Monthly Bills irrevocable Letter of
Credit with validity of 3 months that would be renewed every quarter, which may be drawn up by
the Seller in the event of delay in remittances of the Monthly Bill to the Designated Account. All the
costs relating to opening & maintenance the Letter of Credit shall be borne by the Procurer.
7.6 Events of Default
Upon the occurrence of an event where the Procurer has not made payment by Due Date of an
invoice through the Payment Mechanism provided in the PPA & after giving a notice of 7 days to the
Procurer, the Seller shall have the right to offer 100% of contracted energy (Default Energy) for sale
to third parties.
In case of third party sales as permitted in the Article 9.5 of PPA, 85% of the realization from sale of
Contracted Energy to third party shall be transferred to the Procurer subject to maximum of Tariff
Charge Payments and the balance shall be retained by the Seller. Any amount received on UI account
up to the Contracted Energy shall be transferred to the Procurer.
The Procurer shall continue to pay Tariff charges to the Seller even for default electricity sold to third
parties or remaining unsold such periods.
Such Tariff charge Payment liability shall cease on the date which occurs on the expiry of a period of
180 days from the date of occurrence of a Procurer event or default, provided, if prior to such date,
43
such Procurer Event or Default Event or default has not ceased and regular supply of power for a
period of at least 90 continuous days has not occurred.
7.7 Obligation of Parties
7.7.1 Seller’s Obligation
The Seller has agreed & undertaken to duly perform and complete the following activities at the
Seller’s own cost and risk, unless such completion is affected by any Force Majeure event or due to
the Procurer’s failure to comply with their obligation or if any of the activities is specifically waived in
writing by the Procurer.
 Always be in compliance with Law and obtain and maintain in full force and effect all consents
pursuant to the PPA and applicable Law for construction, commissioning, operating,
generating and export of power from the Project to the Procurer, and if required by the
Procurer, provide the Procurer with evidence that all such consents have been duly obtained;
 Sent a written notice to the Procurer indicating the total installed capacity and contracted
energy for the Project;
 Commence supply of Contracted Energy by the Scheduled Delivery Date in accordance with
the provisions of this Agreement, which is July 1st, 2019. However, the Seller and the Procurer
may mutually agree for commencement of supply of Power in a phased manner from the
revised scheduled delivery date as specified in the PPA.
 Maintain insurance coverage in accordance with the requirements of the Project; and
 Shall be responsible at its cost and expense for the delivery of the Power at the Delivery Point.
All transmission charges, transmission losses and operation charges applicable up to Delivery
point shall be borne by the Seller. The Seller shall coordinate with BPC up to the Delivery Point
to ensure that the facilities at the interconnection Point are tested & commissioned prior to
the Scheduled Synchronisation Date and such facilities are maintained in accordance with
Prudent Utility Practices during the Terms of Agreement by the Seller. The seller shall ensure at
all times that Delivered Energy would be made available to the Procurer at the delivery point.
7.7.2 Procurer’s Obligation
The Procurer has agreed & undertaken to duly perform and complete the following activities at the
Procurer’s own cost and risk, unless such completion is affected by any Force Majeure event or due
to the Seller’s failure to comply with their obligation or if any of the activities is specifically waived in
writing by the Seller.
 Off-take all Delivered Energy made available by the Seller at the Delivery Point & pay monthly
bills in accordance with this Agreement.
 make all reasonable arrangements for the evacuation of the Early Energy from the Power
Station; subject to the availability of transmission lines.
 Maintain Trading License and other authorisation required for import of power from Bhutan;
 Coordinate and cooperate, on best endeavour basis, with the Seller, BPC and the CTU and any
other concerned authority with regards to interconnection Facilities to enable the Seller to
design, install or operate or otherwise arrange for the evacuation of the energy and its delivery
at the Delivery Point;
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 Shall be responsible for obtaining open access in India and evacuation of Delivered Energy
from the Delivery Point entirely at its cost and expense. The Point of Connection(POC) Charges
as notified by the competent authority in India at the Delivery Point and all transmission
charges, transmission losses and operation charges levied by the Regional Load Dispatch
Centre(RLDC)/State Load Dispatch Centre; and
 The open access arrangement in India shall be finalized in all aspects prior to the Scheduled
Delivery Date or the Revised Scheduled Delivery Date.
7.7.3 Joint responsibilities of the Procurer and the Seller
 The Procurer & the Seller shall jointly agree on the specific date of commencement of supply
of power and quantum of the contracted energy to be supplied to the Procurer from such
date, in case the COD of the project takes place before the Scheduled Delivery Date.
 This date shall be mutually agreed between Parties and shall be the Revised Scheduled Date
for the respective quantum of power which shall be purchased at the Tariff specified in this
Agreement.
7.8 Penalties
7.8.1 Liquidated Damages for Delay in Commencement of Supply of Power to Procurer
If the Seller is unable to commence supply of power to the Procurer by the Scheduled Delivery
Date or the Revised Scheduled Delivery Date, as the case may be, provided the procurer is ready to
offtake power, other than for the reasons specified in Article 5.7.1 of PPA, the Seller shall pay to
Procurer liquidated damages as per this Article 5.8.1 for the delay in such commencement of
supply of power and making the Contracted Energy available for dispatch by the Scheduled
Delivery Date or the Revised Scheduled Delivery Date, as the case may be. In addition to the
liquidated damages, the Seller shall reimburse the transmission open access charges paid by the
Procurer at actual for the period of delay of commencement of supply of power.
The liquidated damages payable by the Seller to the Procurer shall be calculated corresponding to
the monthly contracted energy for the number of days of delay multiplied by Rs.0.359 per kWh.
Monthly Contract Energy Schedule for the Project (for the first 12 years from the COD of the project)
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
Contracted 11.07 9.24 11.49 13.92 23.74 42.48 52.03 56.85 49.7 33.99 17.59 12.92 335.04
Energy (in 3
Mn Units)
The Seller’s maximum liability under the article 5.8 of PPA shall be limited to the amount of
liquidated damages calculated in accordance with Article 5.8.1 for and up to twelve (12) months of
delay for commencement of supply of power from the Schedule Delivery Date or the Revised
Scheduled Delivery Date as the case may be.
Provided that in case of failure of the Seller to start supply of power to Procurer even after expiry
of twelve Months from its Scheduled Delivery Date or the Revised Scheduled Delivery Date, as the
case may be, it shall be considered as a Seller Event of Default and provisions of Article 12 in PPA.
45
The amount due from the Seller to the Procurer pursuant to Article 5.8.1 will be paid within 10 days
of the immediately preceding month.
Liquidated damages payable by the Seller as per this Article shall be paid by the Seller irrespective
of whether Procurer arranges the power from any other source or not.
The Parties has agreed that the formula specified in Article 5.8.1 for calculation of liquidated
damages payable by the Seller under the Article 5.8, read with Article 12 is accurate pre-estimation
of the actual loss that will be suffered by the Procurer in the event of Seller's delay in starting
supply of power by the Scheduled Delivery Date or the Revised Scheduled Delivery Date, as the
case may be.
7.8.2 Delay in Offtake of Power by the Procurer
If the Seller is otherwise ready to commence supply of power on the Scheduled Delivery Date or
Revised Scheduled Delivery Date, as the case may be, but is not able to commence supply of power
by the said date due to a Procurer Event of Default, the Procurer shall be liable to pay to the Seller
the entire Tariff Charge Payment corresponding to the Contracted Energy, provided that the
Seller has been able to make the plant available and ready for generation, till the period the
Procurer is able to offtake the Contracted Energy from the Seller. In case during this period the
Seller is able to sale such power to a third party, eighty five (85) percent of the realization from
sale of Contracted Energy to third party shall be transferred to the Procurer subject to maximum of
Tariff Charge Payments and the balance shall be retained by the Seller. Any amount received in Ul
account due to any unavailed energy up to the Contracted Energy would also be transferred to the
Procurer.
7.8.3 Limit on amounts payable due to default
The Parties expressly agree that the Procurer's only liability for any loss of profits or any other loss
of any other kind or description whatsoever (except claims for indemnity under Article 13),
suffered by the Seller by reason of the Procurer's failure to meet its obligations under Article 4
shall be to pay the Seller the amounts specified in Article 5·9 and Article 12 of PPA.
Similarly, Seller’s only liability for any loss suffered by the Procurer of any kind or description
whatsoever( except claims for indemnity under Article 13) by reasons of the Seller's failure to meet
its obligation of providing supply of power on the Scheduled Delivery Date or Revised Scheduled
Delivery Date(s),as the case may be, shall be as per Article 5.8 and Article 12 of PPA.
7.8.4 Penalty for shortfall in Supply of Power
In case the Delivered Energy is less that the Contracted Energy on an annual basis (Contract Year) due
to inability of the Seller to deliver the entire Contracted Energy, the Seller shall pay a penalty. The
methodology that will be followed to estimate the penalty amount has been provided in Schedule 3
under Clause 3.1.3of PPA. In addition to the penalty, the Seller would also reimburse Procurer the
open access charges proportional to the shortfall in Contracted Energy.
Penalty shall be determined in accordance with Clause 3.1.3 of Schedule 3. The penalty shall be
applicable on an annual basis and settled in the first monthly bill of the subsequent Contract Year.
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7.8.5 Transmission Losses
Transmission losses from the Delivery Point onwards would be borne by the Procurer.
Transmission losses till Delivery point would be to the account of the Seller.
All transmission charges, transmission losses and operation charges applicable up to delivery point
shall be borne by seller.
7.9 Termination
7.9.1 Termination due to Seller Event of Default
Upon the occurrence and continuation of any Seller Event of Default under Article 12.1 of PPA, the
Procurer shall have the right to deliver to the Seller a notice of their intention to terminate this
Agreement (Procurer Preliminary Default Notice),which shall specify in reasonable detail, the
circumstances giving rise to the issue of such notice.
Following the issue of Procurer Preliminary Default Notice, the Consultation Period of ninety (90)
days or such longer period as the Parties may agree, shall apply and it shall be the responsibility of
the Parties to discuss as to what steps shall have to be taken with a view to mitigate the
consequences of the relevant Event of Default having regard to all the circumstances.
During the Consultation Period, the Parties shall, save as otherwise provided in this Agreement,
continue to perform their respective obligations under this Agreement.
After a period of seven days following the expiry of the Consultation Period unless the Parties shall
have otherwise agreed to the contrary or the Seller Event of Default giving rise to the Consultation
Period shall have ceased to exist or shall have been remedied, the Procurer may terminate this
Agreement by giving a written Termination Notice of thirty (30) days to the Seller.
Where this Agreement is terminated by the Procurer pursuant to Article 12.3.4 for a Seller Event of
Default, the Seller shall pay a sum of INR 30 million as termination payment within thirty (30) days of
the termination of the Agreement. The Seller would also reimburse penalties paid by the Procurer to
CTU/STU at actual. Any amount remaining unpaid on the part of the Seller shall be considered as a
material breach and the Procurer shall have the right to enforce such claim as per the
provisions of the Law.
7.9.2 Termination due to Procurer Event of Default
Following to the issue of a Seller Preliminary Default Notice, the Consultation Period of ninety days or
such longer period as the Parties may agree, shall apply and it shall be the responsibility of the
Parties to discuss as to what steps shall be taken with a view to mitigate the consequences of the
relevant Event of Default having regard to all the circumstances.
During the Consultation Period, the Parties shall continue to perform their respective obligations
under this Agreement.
After a period of 7 days following the expiry of the Consultation Period unless the Parties shall
have otherwise agreed to the contrary or the Procurer Event of Default giving rise to the
Consultation Period shall have ceased to exist or shall have been remedied, the Seller shall be free to
47
sell the Contracted Energy to any third party of the Seller’s choice provided the Procurer shall have
the liability to make Tariff Charge Payments for the Contracted Energy based on the Deemed
Delivered Energy to the Seller for the period upto the Expiry Date, subject to maximum of 180 days
from the eighth day after the expiry of the Consultation Period.
Provided further that in such period, in case the Seller is able to sell the energy to any third party
85% of the realization from sale of Contracted Energy to third party subject to maximum of
Tariff Charge Payments shall be transferred to the Procurer and the balance shall be retained by the
Seller.
For the avoidance of doubt, the above excess adjustment would be applied on a cumulative basis for
such period. During such period, the Seller shall use its best effort to sell the Contracted Energy to
such third parties at the most reasonable terms available in the market at such time, having due
regard to the circumstances at such time and the pricing of electricity in the market at such time.
Provided further, the Seller shall ensure that sale of power to the shareholders of the Seller or any
direct or indirect Affiliate of the Seller/ shareholders of the Seller, is not at a price less than the Tariff,
without obtaining the prior written consent of the Procurer. Such request for consent would be
responded to within a maximum period of 3 days failing which it would be deemed that the Procurer
has given his consent.
Provided further that at the end of such period, this Agreement shall automatically terminate and
thereafter, the Procurer shall have no further Tariff Charge liability towards the Seller.
7.9.3 Termination due to Force Majeure
Termination due to Force Majeure shall be as per Article 10.8 and 10.9 of PPA.
7.10 Conclusion
Entura believes that the PPA is in order and is as per the market norms. No risks are foreseen
because of conditions of PPA.
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8. Review of construction and disbursement schedule

8.1 General
Entura has been provided with the optimised construction schedule for the project. As per the
schedule and executed contracts the Nikacchu hydropower project is planned to be completed in
1460 days (or 48 months). The contractor’s bids provide for detailed planning and computations for
the equipment required for executing all works at different stages of the project. Entura has
reviewed the proposed construction schedule and the methodology and the findings of the same are
presented in this chapter.
8.2 Review of Pre- construction Activities
THyE has already completed the following initial infrastructure works:

 Road to Dam site
 Temporary bridge on Nikachhu River to access diversion tunnel inlet and outlet portal.
 Access road to all five adits for HRT.
 Access road to adit portal for surge top and bottom.
 Access road to intermediate adit portal of pressure shaft.
The following initial infrastructure works was in progress at the time of site visit (18/12/2105) and
was scheduled for completion in 2-3 months.
 Access road to Powerhouse site.
 Construction Camp
The following initial infrastructure work is in the scope of MP-1 contractor HCC:
 Access road to de-silting arrangement.
 Setting up of explosive magazines, mobilization of temporary explosive magazines.
As from above, part of initial infrastructure is complete and therefore construction of Dam, HRT,
Surge shaft, pressure shaft and powerhouse can be started immediately.
8.3 Review of proposed methodology by MP-1 contractor HCC
The construction methodology proposed by HCC in its bid has been reviewed and the following are
the comments on this aspect of the contract:
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8.3.1 Review of proposed infrastructure works
8.3.1.1 Manpower Colonies
The colonies for manpower to be deployed on the main works like main dam, HRT at the five adits
and the power house has been located near to the places of work. The accommodation proposed for
housing them also seems adequate.
8.3.1.2 Aggregate Production and Processing
 An aggregate processing plant of 150 TPH capacities has been planned at Adit No.3 of the HRT
to cater the overall demand of aggregate for concreting and shotcreting requirements. The
capacity of the plant should be fine-tuned by working out the monthly requirements of
different works throughout the construction period and finding the peak requirement
continuously during a few months. To economize, this demand may be reduced by say 15-20 %
and the plant be installed well in time. A stock-piling area would be required near to the plant
to produce the aggregate during the lean period of requirement and stock-piling it to be used
during the peak requirement period. This would require meticulous planning and optimum
operation of the plant by ensuring minimum downtime of any of its components. The involved
logistics would have to be meticulously worked out. Spare parts inventories would have to be
watched all the time. Jaw and cone crushers have the bad reputation of frequent break downs.
Complete awareness would have to be created towards safety aspects. Accidents slow down
the work and break the momentum.
 No mention has been found about the testing of the raw material proposed to be used for
aggregate production regarding its suitability for use in concreting and shot-creting. Tests
should be carried out from reputed laboratories to ascertain the suitability according to
standards, particularly regarding alkali reaction and abrasion.
 The capacity of the 120 cum /hr concrete batching and mixing plant seems adequate.
However, the 12/15 cum/hr reverse concrete mixers planned at the portal of the adits (before
the 30 cum/hr plants are operational) should be five in number, one outside each adit and not
lesser as planned. As adits are far away from each other, transporting concrete material from
one to the other site would not be advisable.
8.3.1.3 Workshops/Offices and Stores:
The provisions made for the offices and stores seem adequate. The stores should be interlinked on
the local net to keep watch on the stock inventories there. The central warehouse shall manage all
stores. Slow moving and fast moving parts should be judiciously planned.
8.3.1.4 Ventilation Requirements:
Detailed computations have rightly been made to assess the requirement of ventilation inside
enclosed work sites. Requirement of air by man power and equipment’s has been computed, but the
requirement to offset the fumes created by shotcrete machines (though wet type) has not been
taken into account. Adequate provision for that may also be made. Workers are often seen covering
their faces with cloth during wet shotcreting machine operations, even in otherwise well ventilated
tunnels.
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8.3.1.5 Cement Handling and Storage:
As mentioned in the agreement, HCC has indicated that bulk handling system for cement would be
explored. It is a very good effort and must be implemented in the interest of the health of the man-
power handling cement bags. Manual cement handling should be avoided as far as possible.
8.3.1.6 Other Facilities
Several other facilities like construction power and standby, compressed air supplies, electric power
distribution systems, telecom system, medical facilities, POL storage and transportation, have been
outlined and would be provided adequately by HCC.
8.4 Review of construction methodology of major components
HCC has outlined the construction methodology for each major component and computed the
equipment required there on. Eight months working period has been adopted which is practically
correct in the project area. Component-wise comments are as below:
8.4.1 River Diversion
The diversion arrangement is planned to be carried out in two phases. In the first phase, the work is
to be carried out for the construction of 4 m diameter, 147.9 m long diversion tunnel. In the second
phase the construction of D/s Cofferdam and U/s Cofferdam will be carried out.
The methodology of construction outlined in the document seems satisfactory. The advance rates
planned to be achieved are achievable, but good control would need to be maintained on the
excavation effort. All inputs should be promptly arranged to ensure smooth and trouble free working.
 The velocity of river water as 10.22 m/sec, seems to be on the higher side and needs to be
reviewed at detailed design stage. RCC lining was proposed which is now being changed to 250
mm thick SFRS, which should not be done at such high velocities. Diversion works are the
lifeline of the project and any mishap or untoward happening can halt the entire project.
During floods the river water would be carrying lot of sediment load including boulders, trees,
etc. which could cause severe damage to shotcrete lining. Performance of shotcrete lining
against concrete lining in high speed water is not good, as shotcrete lining would have an
uneven surface which would give rise to eddy formations locally, causing cavities. Economizing
on such works should be given up.
 The expected geology of the tunnel indicates chances of rock burst or even squeezing
formations at some locations. Though rock bursts remain basically an execution hassle,
squeezing rock zones deserve the attention of the designers to suggest measures to mitigate
the rock pressures. At some projects, collapsible supports/ lining have been envisaged to
dissipate the rock pressures.
 No mention of the firing for blast holes been made. The firing of the holes should be done with
non-electric detonators having sufficient delays. This is an important safety advisory especially
in hilly areas where rain storms/ lightning storms occur frequently without warning. The HRT
blasting procedures should be done with NON-EL detonators as they are popularly called.
 Rock supports in five rock classes have been depicted in the agreement. Perusal of the section
for Class IV rock types reveals that the precise excavation for the partial rib support with the
outstretched feet resting on rock haunches in a tunnel of small size is not practical. In large
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tunnels where excavation is done by heading and benching method, this method is suitable but
in small tunnels it is not. The shape of the sloping haunch to rest the rib foot is seldom
achieved as rock is generally jointed and fractured. It may be reviewed.
 No mention has been made in this section about the management of muck disposal sites. It
might be having a place in the environment section. Lot of emphasis is now laid on the proper
management of the muck dumps. Rightly so, as they are very untidy and not properly taken
care of when the work finishes and cause mud slides later on. It is generally required of the
execution agency as well as the owner, to provide a smooth longitudinal as well as lateral,
grade to the top surface of the pile by giving it a gradual slope towards the hill side. No rain
water should be allowed to flow over the slopes of the piles causing deep ruts. A small berm
type obstruction is made on the valley side along the length of the pile, to prevent water from
spilling on the slopes. Finally, the slopes are to be covered with jute net with square holes,
through which, over a period of time, grass and shrubs grow to give the whole area a green
look.
 The construction of diversion tunnel and coffer dam is proposed to be completed in 6.5
months which is considered to be in order.
8.4.2 Dam
The excavation of both the dam abutments up to a certain level above the river bed in the first
season is good planning as it would reduce the quantities to be handled in the next season, when the
schedule would be rather tight. To carry out this excavation the approach roads or ramps would have
to be made and remade several times to access the desired elevation of excavation. This would leave
the whole hill face on both banks badly scarred for all times to come, if the ramps are made in the
slopes downstream of the dam axis. If this effort is carried out on the slopes upstream of the axis, the
scarred slopes would remain generally submerged and be obscured from general view. Of course, the
topography of the area would decide this.
Excavation Equipment: The equipment proposed to be deployed for the excavation of both
abutments, including their stabilization, the river bed, etc. seems appropriate and adequate. If tyre
mounted drills for carrying out drilling for blasting along slopes are used in place of ROCs, they would
prove more versatile and handy. They can be shifted easily from one site to another simply by towing
behind light vehicles. They are also self-propelled for short distances. But the choice rests with the
contractor depending upon the fleet he already has. Wet shot-creting in place of dry may be
preferred as it is less polluting.
Concreting: The concreting of the dam is envisaged to be done with one plant of 120 cum/hr
capacity and alternatives are being explored to install two plants of 60 cum/hr capacities. The latter
would be preferable as having two plants would be better than one. In case of any major break down
of one plant the other would be available, though the progress would not be as planned. This
possibility needs to be explored.
Another aspect worth mention is the loading of concrete from belt conveyors into buckets which
would be taken to the pickup points of the tower cranes. This might not give good quality concrete as
the concrete fed to the belt conveyors would have a relatively higher slump and when such concrete
is transferred to buckets, it would segregate during the travel. Larger sized aggregates would settle at
the bottom of the bucket and possibly jam the gate of the bucket. Transit mixers would be a better
choice as they give good quality concrete because of rotation of the drum during transit.
52
It has also been mentioned in the placement methodology that sometimes pumped concrete may be
used along with bucket concrete. This should be avoided entirely as the slumps of both would be very
different and they should not be mixed. In the case of piers it is quite likely that unloading of buckets
might not be feasible as their positioning would be difficult and time consuming in view of the
protruding reinforcement bars above the top of the block being concreted. In such cases concrete
may be placed with pumpcretes, though the cement consumption per block would be higher for the
same strength of concrete as compared to bucket concrete.
Whereas, cooling of concrete is planned in the hot weather; it is planned to use hot water for
producing concrete in extreme cold weather. Very appropriate planning, but the placed concrete
should be covered with thick material to prevent its rapid cooling and cracking in extremely cold
weather.
The dam construction working period is considered 6 month only. The monsoon occurs for four
months in a year and another two months effect during winter on account of snow. The construction
of dam including installation of gate is proposed to be completed in 38.5 months.
The period considered for construction of dam is found to be in order.
8.4.3 Power Intake & feeder tunnel
Excavation of intake is planned to start simultaneously with excavation of dam body on left bank
above river bed level and scheduled to complete in 3 months. Then the excavation of feeder tunnel
will be completed in 1.5 months. Thereafter, concreting of intake is taken up and shall be completed
in 7.5 months. Three months are kept for erection of gates.
The construction of intake, feeder tunnel including installation of gate is proposed to be completed in
15 months.
The period considered for construction of Power Intake & feeder tunnel are found to be in order.
8.4.4 Desilting Chambers & service tunnels
The sequence of excavation of the desilting chamber has been aptly planned by full face excavation
of the top arch portion and then benching. The concreting of the excavated portion would be done
before further excavation is carried out. The rock supporting would be done concurrently. It was
given to understand that the desilting basin dimensions have not yet been finalized as the model
studies thereof have yet to be done. This should be given priority if not already under way.
Construction adits to de-silting chambers and gate operation tunnel have been planned to start
simultaneously and around 3.5 months are kept for these activities. After completion of construction
adits main, excavation of main de-silting chambers shall be carried out in next 8 months. Thereafter,
concreting of de-siting chambers and excavation of silt flushing tunnel shall be carried out.
The constructions of de-silting chambers are proposed to be completed in 16.5 months.
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In Entura’s opinion, the construction of silt flushing tunnel is an independent activity and can be
started simultaneously with the construction adits for de-silting chambers and gate operation tunnel.
Also, no activity for erection of gates is shown in construction schedule. The time of gate erection
should also be considered in the construction schedule, even though construction of desilting
chambers is not a critical activity.
8.4.5 Head Race Tunnel
The 12.1449 km long and 4m diameter head race tunnel is planned to be excavated in parts through
five adits. Each adit will open two work faces, one towards the upstream and the other to the
downstream sides. There will be ten faces to work from and an average progress of 77 m per month
is expected from each face. The maximum length would be about 1554 m (on face no.6). The
advance rate of 77 m per month seems achievable by good control of the job.
Five intermediate adits are proposed along the alignment of HRT for excavation of tunnel from de-
silting chambers to surge shaft. The maximum length of HRT between two adits has been limited to
3.0 km. Each adit is D-shaped of 5m diameter. The five adits are 510 to 1066 m long. The longitudinal
section of the adits reveals that the longitudinal slopes of adit nos.2 and 5 are about 1:12. These
seem to be a bit severe and could pose problems to traffic going inside. Concrete could spill out of
the discharge hoppers of the transit mixers. All mucking and concreting equipment’s could slip on
such a slope as tunnel floors are always wet due to seepage water dripping on the floor and other
reasons too. Thought should be given to this aspect to make working easy. In case no solution is
forthcoming, the adit floor could be given a concrete cover of adequate thickness to ease traction
problems. Even the ventilation ducts could get damaged due to slipping traffic. A small investment
but would be very useful. Any factors likely to derail smooth working should be taken care of initially.
Some percentage (8%) of the length is expected to pass through class V rock formations. As widely
known, such treacherous zones have to be dealt with very cautiously and firmly. Formation of cavities
should be avoided at all costs. The safest bet is to resort to extensive fore poling of the top 140
degrees arch and the earlier it is resorted to, the better it is. Steel bars of 32 mm diameter are
preferable than 25 mm bars provided in the document. However, forepoles have perhaps been
inadvertently omitted in drawing no. 20707-CO3 for class V section. Advance probe holes drilled in
the face and watching the cuttings flushed out of the hole, predictions could be made by the
geologists about likelihood of poor rock masses ahead. Alternatively, self-drilling anchors or SDAs
with sacrificial drill bits could be used, which are much more expensive than fore poles made out of
common tor-steel bars of 32 mm diameter. To proceed with the excavation in class V zones, no
drilling blasting can be done as drilled holes would collapse once the drill rods are retracted.
Hydraulic breaker of matching capacity fitted on the excavator chassis should be deployed to
excavate a one meter trench along the periphery for a round length of 75 cm. The excavated muck
should not be removed. The robotic wet shotcrete machine should be stationed at the heading
behind the excavator, along with one transit mixer having shot crete mix ready to be used. As soon as
the trench is excavated, the lower side of the fore poles would be exposed as any muck attached to
them would fall down. The robojet should shoot a “50 mm thick layer of sealing shotcrete” to cover
the crown rock between the fore poles. That would take care of any rock falls from between the fore
poles rendering the work area below the crown safe for the workmen. Then the balance heading
should be excavated with the breaker and muck removed.
In case the face tends to yield, rock breaking should be stopped and face rock bolts and face
shotcrete should be done with or without wire mesh to arrest the movement. This needs judgment
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on part of the tunnel foreman to decide what is to be done. Extra caution taken is always better than
rash action. Investing in a few extra forepoles or rock bolts would be wiser than to land up with a
tunnel cavity.
In case water is encountered, deep holes of 50 mm should be drilled and perforated pipes introduced
in them to guide the water out of the rock mass to the gravity drain. Steel arches at close spacing
could be erected under the forepole protected roof to support the crown and complete concrete
backfill provided. Backfill concrete of M-15 or M-20 strength should suffice in place of M-40 planned.
In more extreme situations, pipe roof supports to the crown may be provided for complete safety.
But the formation of cavities and tunnel collapses should be history.
Pressure of advancing the heading should be taken off the crew to go one step at a time till the
distress reach is over.
Concreting of HRT: The methodology envisages the deployment of conventional mobile steel forms
called gantries or six steel forms connected together to make a long form to receive concrete by
continuous pumping. Each system has its merits and de-merits. However, continuous placement of
concrete should be preferred if all inputs are planned and provided at site. The advance rates of 246
m and 400 m of concrete lining by conventional and continuous placement are achievable by all
means. The invert concrete should, however, be done with the help of screeds to guide the masons
finishing the invert surface manually. In the absence of screeds, undulations might appear which may
not be acceptable from the standards laid down by the QAQC.
The excavation of construction adits is planned to start after completion of initial infrastructure and
completed in 10 months with considering average excavation progress of 3.4m per day. However in
HRT the average excavation and concrete lining progress of 2.8 m/ day and 143m/month
respectively. The grouting and cleaning of HRT is planned to start after one month from start of its
concerting and finished after one month from date of completion of concrete lining. Fifteen (15) days
are kept for tunnel plugging.
Total time period considered for construction of HRT is 40.5 months.
The progress considered for excavation of adit and main HRT seems to be manageable provided a
good control on overall job is there and geological condition is as interpreted.
8.4.6 Surge Shaft
The surge shaft is proposed to be excavated in the conventional way, i.e. completing the top dome
through a top adit, excavating a pilot hole from bottom to top with a raise climber and finally
widening the pilot from top to bottom by disposing the muck in the pilot shaft. Rock support required
for the sides of the shaft would be concurrently provided.
Lining of the shaft could be done by slip forming. As the height is not much, conventional forms can
be used instead.
The surge shaft is proposed to be completed in 18.6 months.
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The activity for erection of gate is missing in schedule. The time frames provided in the methodology
are adequate.
8.4.7 Valve Chamber
The valve chamber excavation is proposed from top to bottom and excavated in 3 months. Six (6)
months is kept for concreting and three (3) months for HM works.
The period considered for construction of valve chamber is found to be in order.
8.4.8 Pressure Shaft
A 3m diameter steel lined pressure shaft is proposed from the surge shaft to powerhouse. The
pressure shaft initially runs horizontal for a length of about 258 m and then drop down with an
inclination angle of 50 degrees for approximate length of 630 m. Pressure shaft bifurcates into two
unit pressure shafts each of 2.1 m diameter near the powerhouse.
The pressure shaft excavation is started from the top and bottom horizontal pressure shaft tunnel
and then the inclined pressure shaft will be excavated. The pressure shaft would be excavated in four
parts. After the excavation activities are complete, the steel liners would be erected and concreted
concurrently. Thereafter the ferrule erection and concrete backfilling activated shall be started. Total
period for completion of pressure shaft is planned for 35 months.
The time schedules arrived at are reasonable and achievable with good planning and control.
8.4.9 Power House Complex
The Powerhouse complex consists of Machine Hall, Transformer Hall and Tailrace Tunnel. The
excavation shall be done by excavating an adit cum ventilation tunnel. The mucking of the cavities
will be done from Adit to top of power house, Main Access Tunnel and Adit to bottom of pressure
shaft as well as through the tailrace tunnel.
Erection of crane beam will be done after excavation in the power house. The crane beam will be
supported by rock anchors. After erection of E & M equipment and the second stage concreting will
be carried out. Simultaneously lining of Unit TRT will be done. All finishing works of Powerhouse and
transformer Caverns will be completed.
The excavation of the power house has been planned by making a pilot at the crown of the cavity,
widening it and then excavating benches at slopes of 1: 10 to reach the bottom in front of the MAT.
Concurrent rock supports would be provided as it would not be possible to install them later on. The
concreting has been started with the construction of the columns and beams in the service bay and
then the unit bays. The placement of concrete is then planned to be done concurrently with the
56
erection of E&M components, in stages. Similar activities would be carried out in the transformer
cavern.
The methodology outlined seems appropriate. Total period for completion of power house complex
is planned for 41.7 months.
The period considered for construction of power house complex is found to be in order.
8.4.10 Construction Schedule
The detailed construction schedule for the execution of the project has been appended in the
agreement. All major works have been broken down into smaller items and included in the schedule.
The time frame has mostly been adopted the same as worked out in the construction methodology.
However, the following is observed:
 Model testing , presumably of the de-silting basin, has been shown to take 104 days after
which the designs would be prepared. This item is liable to get delayed.
 Pot head Yard work has been shown to take 28 months, which seems on the higher side. If the
site is approachable and available the same could be started earlier. The hill stabilizing works
could also be completed after that.
The overall schedule of 48 months envisaged seems correct and achievable. There are always delays
waiting to happen. A review mechanism like PERT and CPM charts could bring out these items.
8.4.11 Electro-Mechanical Works
Time considered for execution of E&M Contracts is 1430 days. However as mentioned in Appendix-4-
Time Schedule of Contracts, M/s Voith has accepted that the integrated construction schedule shall
be prepared by converging their MP-2 Schedule with MP-1 construction schedule and the integrated
construction schedule shall be signed amongst THyE, M/s Voith and MP-1 Contractor at an
appropriate time within 3 months from signing of Contract Agreement for MP-2.
8.4.12 Transmission System
Bhutan Power Corporation Limited (BPC) & Tangsibji Hydro Energy Limited (THyE) have entered into
an MOU for construction of the 132 kV double circuit transmission line from the Pothead yard of
Nikachhu hydropower project to Pothead yard of Mangdechu Hydro Power Project to evacuate the
118 MW Power generated at Nikachhu hydropower project before January 2019. Time period
considered are adequate and in order.
57
8.4.13 Testing and Commissioning
The 31 day and 30 days are planned for dry commissioning of first and second unit respectively. For
wet commissioning of first and second unit 30 days and 28 days are planned respectively. Time
period considered for dry & wet commissioning are adequate and in order.
8.5 Conclusion
The critical component of the project is HRT and considering no major variation in the interpreted to
actually encountered geology in the HRT, the project schedule of 1460 days to completion is
workable.
58
9. Review of Project cost

9.1 Introduction
The cost of the project was reviewed based on the current layout, interpreted geology, contract
condition for price variations and price adjustments and other risks which may have an impact on the
project cost.
9.2 Reconciled and updated Project Cost
Reconciled project cost as per the DPR and MOU between BPC for transmission line was made
available. Entura has updated this cost considering the available land lease agreements and available
contracts for main packages MP-1,MP-2 and the justification provided by the client vide email dated
1st July, 2016.
Particulars Reconciled cost Updated cost Remarks

(as per DPR and based on the
BPC transmission contracts and
agreement) the information
provided vide
(in Million Rs.)
mail dated 1st
July, 2016
(in Million Rs.)
Land 11.8 4.75 The amount is derived as per
the lease agreement between
RGOB and with few
individuals and based on the
justification provided by the
client vide email dated 1st
July, 2016.
Civil Works 4,490.4 4,202.237 Based on the justification
provided by the client vide
email dated 1st July, 2016 and
using Euro rate, 28 days
Hydro-mechanical Equipment 263.4 354.597
before bid submission.
Electro-mechanical 1,822.9 1,560.91 Based on the justification
Equipment provided by the client vide
email dated 1st July, 2016 and
using USD rate, 28 days
before bid submission.
Transmission Lines 217.9 233.836 The amount is as per the
Contract agreement
between BPC.
59
T&P 10 10 Assumed same as no details

available
Total Hard Cost 6,816.4 6,366.33
Environmental Costs 168.5 168.5 Assumed same as no details

available
Preliminary and Pre- 981.6 981.6 Assumed same as no details
operative Expenses available
Project Preparatory Work 787.6 787.6 Assumed same as no details
available
Contingency 1,904.4 2,354.47 Additional savings of Rs
450.07 million from MP-1,
MP-2 contracts, Land and
Transmission line, reflected
in contingency.
Project cost excl. IDC and 1,0658.5 10658.5
margin money for WC
Margin Money 57.1 57.1 Assumed same
Interest During Construction 1,178.5 1,178.5 Assumed same

and Finance Charges
Total 11,894.1 11,894.1
9.3 Reasonability of prices
The reasonability of contract prices has been established in Chapter 6 and found to be reasonable.
9.4 Cost variations
As of date the below cost optimisations and implications are feasible/likely to impact the project:
9.4.1 Cost optimisations
9.4.1.1 Desilting Basin
The length of the Desilting Basins in the tender documents is considered as 175 m. While, Entura
carried out a detailed analysis and found that the length can be optimised to 120 m. This is in
consistence with the theoretical calculations reported in HCC bid. However, M/s HCC has proposed
length of Desilting Basin as 160 m in its bid. Yet, as per the contract the length will be fixed post
model studies and is in the scope of HCC.
Entura believes that a cost saving of around 4.5 crores is feasible on this account. However, the exact
cost saving will be governed by the results to be obtained post model studies.
60
9.4.1.2 Powerhouse
As per the contract agreement, height of the powerhouse is reduced by 1.63 m due to reduction in
height of Generator shaft. The reduction in height is agreed in the contract between HCC and THyE.
Entura believes that a cost saving of around 30 lacs may be feasible on this account. However, the
exact value will be governed by the agreed reduction in quantities between HCC and THyE.
9.4.2 Cost implications on account of HRT rock class revalidation by Entura
Geological variations are permissible in HRT and adits as per the contract with HCC. The payments for
HRT will be made based on actual rock class to be encountered during execution. However, based on
the surface and interpretative subsurface geology from drilling data, the rock mass classes have been
classified in the tender document. Entura carried out an independent study and the rock
classifications based on Entura’s study differ slightly as presented in the tender documents (refer
table 5.1). Considering Entura’s assessment, provision for an additional cost of INR 15 crores is
required to be built in.
It is noteworthy that this cost variation is just a guide and to provide awareness that may occur. This
indirectly indicates a limited variation range in rock class, which cannot be challenged but to keep in
mind for evaluation and assessment purpose.
9.5 Review of suitability of Contingency
As per DPR reconciled cost document, contingency of Rs. 1904.4 million has been included in the
Project Cost to provide for possibility of higher quantity of materials required and escalation in prices.
As per the information provided by the client vide email dated 1 st July, 2016, there is an additional
savings of Rs 450.07 million from MP-1, MP-2 contracts, Land and Transmission line, reflected in
contingency. Therefore total contingency is Rs. 2354.47 million.
As per the DPR reconciled cost document, the break-up of Contingencies is as follows:
Sno. Component Rs. (Million)
1 DPR reconciled cost
a Physical Contingency (quantities used) 351.9
b Price Contingency 1552.3
c Sub- Total 1904.4
2 Contingency from additional savings 450.07
3 Total 2354.47
ADB Standard Bidding process has been followed for contracting major components of Nikachhu
hydropower project. The methodology recommended by ADB’s guidelines titled Financial
Management and Analysis of Projects has been followed for provision of contingencies in the Project
Cost. ADB’s guidelines recommend provision for two types of contingencies: physical and price
 Physical contingency, i.e. contingency reflecting increase in Project Cost estimates due to
variation in quantities and methods used, have been provided at the rate of 5% for civil works
and at 3% for the balance components (excluding financing charges) of Project Cost.
61
 Price contingency reflects price increase during the project implementation period from the
date of the base cost estimate. Project cost has been estimated considering 2013 prices and
inflation in domestic and foreign currency have been assumed at 6.5% p.a. and 1.40% p.a.
respectively. Inflation at foreign currency rates have been considered for electromechanical
equipment whereas inflation rates in domestic currency have been applied to all other project
cost components (excluding financing charges).
Entura has reviewed the project contingency and found the methodology used to work out the
contingency to be in order. Also, calculations based on historical weighted rate of inflation using the
price variation formula provided in the contract documents yielded similar inflation percentages.
9.6 Review of the proposed disbursement schedule
The revised disbursement schedule and construction budget received vide email dated 1 st July, 2016
has been reviewed and found to be in order.
62
10. Review of Operations and Maintenance cost &

arrangements
10.1 Operation & Maintenance cost
As per the information supplied by THyE to Entura, Bhutan Electricity Authority (BEA), in its DGPC’s
tariff review report dated October 2013, has carried out an analysis of the actual O&M costs incurred
by DGPC for its current four operating projects in the years 2010 to 2012. Based on the O&M costs as
per DGPC’s P&L statement and after considering certain adjustments (CSR, other income etc.), BEA
arrived at an average actual O&M cost of 0.9% of the capital cost for the period 2010 to 2012. BEA
hence decided to use an O&M benchmark of 1% of capital cost for determining electricity tariff for
DGPC for the year 2013.
Considering the benchmarks set by BEA (which is the relevant authority) and the O&M costs actually
incurred by DGPC in its operating projects, THyE have also considered O&M Costs at 1% of the capital
cost as an appropriate assumption for the base case financial model.
Entura’s observation
Operation & Maintenance cost considered above is in line with the industry practice & based on past
experience of DGPC. As per our experience O&M cost considered is in order.
10.2 Operation & Maintenance Strategy
The maintenance of 118 MW Nikachhu Hydropower Project shall be carried out in accordance with
the Operation and Maintenance Policy 2011 and Operation and Maintenance Strategy, 2013 of Druk
Green Power Corporation Limited (DGPC). Nikachhu Hydropower Project upon commissioning shall
be taken over and owned by DGPC. The Operation and Maintenance will be carried out by DGPC. The
Maintenance requirement for 118 MW Nikachhu Hydropower Project is planned as given below:
1. There shall be eight (8) hours monthly maintenance after every 1,500 hours of continuous
operation during monsoon period.
1. There shall be forty five (45) days continuous annual maintenance for each Generating units
from the month of December to April.
2. The complete station shutdown for ten (10) continuous days would be required every second
year for maintenance of common auxiliaries/components/ equipment.
As per the available data, maintenance schedule on annual basis shall be finalized in consultation
with National Load Dispatch Centre and power off-taker of 118 MW Nikachhu Hydropower Project.
Entura’s observation
Operation and Maintenance strategy planned as above is reviewed & found to be in order.
63
11. Review of Acquired Project Land

11.1 Introduction
The review of the land requirements, presented in the detailed project report of Nikachhu
Hydropower Project has been carried out by Entura. This chapter deals with the review of the land
required for the project and comparing it with the land acquired.
11.2 Review of status of land acquisition
As per the lease agreement dated 1st May 2015 between Ministry of Economic Affairs (MoEA)
represented by Department of Hydropower & Power Systems and Tangsibji Hydro Energy Limited
(THyE), Druk Green, 195. 262 acres of land has been acquired from Government Reserve Forest Land
(GRFL) and 7.459 acre (3.577+3.882) is acquired from private land owners. The land for temporary
works has been acquired for 5 years and the land for permanent works has been acquired for 30
years lease from the date of agreement.
The details of the land required for the various project components as per the DPR and the acquired
land details as per the available Lease agreement have been re viewed. The detail comparison has
been tabulated below in Table 11.1 for works except for access roads and in Table 11.2 for access
roads.
Table 11.3: Status of Land Acquisition for works except access roads
SNo. Description Area Area acquired Status Lease Lease

Required (acres) Agreement Term (as
as per Date per
DPR (in certificate
Acres) of
clearance)
1 Dam
Residential Complex 2.92 Acquired 0.619 1/5/15 30 years
Non Residential 1.48 Acquired (0.48 + 2.38) 1/5/15 0.48 acres

Complex for 5 years
2.38 acres
for 30
years
Reservoir area 12.282 Acquired 1/5/15 5 years
Contractor Facility and 15.9 Acquired 15.069 1/5/15 5 years

Batching plant
64
Muck Disposal 10.03 Acquired 10.746 1/5/15 5 years
2 Powerhouse
Residential Complex 2.92 Acquired 1.509 1/5/15 30 years
Non Residential 2.634 Acquired 1/5/15 1.874

Complex acres for
30 years
0.76 acres
for 5 years
Contractor Facility 18.01 Acquired, 16.6 acres 1/5/15 5 years
Muck Disposal 17.54 Acquired 1/5/15 5 years
3 Surge shaft
Non Residential 0.91 Acquired 1/5/15 5 years
Complex
Contractor Facility 3.85 Acquired 2.994 acres 1/5/15 5 years
Muck Disposal 10.18 Acquired 14.309 1/5/15 5 years
4 HRT & Adits

Adit-1 Contractor 0.9 Acquired 6.206 1/5/15 5 years
Facility
Muck 13.82 Acquired 13.809 1/5/15 5 years

Disposal

Facility

Disposal

Facility

Disposal

Facility
Muck 24.79 Acquired 6.69 acres 1/5/15 5 years

Disposal
65
Adit-5 Contractor 2.5 Acquired 1/5/15 5 years

Facility
Muck 12.76 Acquired 1/5/15 5 years

Disposal
5 Adit to Pressure shaft

Muck Disposal 4.1 Acquired 5.206
6 Construction Power supply
33kV distribution line 59.3 As per the information
for construction Power available with Entura,
supply regarding the
construction power no
rules govern leasing and
acquiring of lands falling
under the Right of Way
(RoW) of transmission/
distribution lines
therefore no land was
required to be acquired
for construction power.
However, Environmental
Clearance was obtained
for the same.
66
Table 11.4: Status of Land Acquisition for access road
Sl. Access Road Area Area already in leased Area in Pvt. Total area to be
No. to (Acres) area (Contractor Land (Acres) leased (Acres)
Construction Facilities
(CCF)/Muck
Disposal(MD)/Batching
Plant BP) (Acres)
1 Power House 5.049 NA
2 Surge Shaft 1.900 0.36 0.10 1.440
3 Adit-V 1.270 0.78 0.490
4 Adit-IV 0.802 0.25 0.552
5 Adit-III 2.559 1.24 0.46 0.859
6 Adit-II 3.684 0.70 2.984
7 Adit-I 2.017 0.40 0.13 1.487
8 Dam 2.371 0.65 0.22 1.024
0.35
0.13
TOTAL 19.652 4.08 1.69 8.836
As per the information available with Entura, for access road to Power House only private lands were
acquired. THyE based on meeting with National Land commission on 13 August, 2014 confirmed that
the Government Reserve Forest Land is not required to be leased since it shall be used as by-pass to
Trongsa-Zhemgang National Highway.
Entura’s Comments
Based on the review it is clear from the above table that THyE have acquired the required 202.721
acres of land for the project.
67
12. Review of Approvals & clearances

12.1 Introduction
Development of a hydropower project in Bhutan requires the securing of permits from a number of
government bodies, and agreement from a wide range of government and public utilities to granting
of the permits.
This section provides the details of the permits and clearances available for the project.
12.2 Available Permits, Clearances and Approvals
The following permits, clearances and approvals are available for the project:
Approvals and Clearances
Clearance/ Purpose and Granted by Granted Valid Valid up to Key findings

Approval extent to from
Concession Ministry of THyE 30 years Concession
agreement Economic from rights are
Affairs, RGoB commercial granted for a
operation period of 30
date years.
Construction
works shall
be
completed
by December
2020.
Concession
period may
be extended
due to force
majeure.
Company to
provide 12%
of the
saleable
energy for
the first 12
years and
18% for 18
years
following the
68
initial 12
years.
RBoB
covenants
that laws and
regulations,
standards or
practices
enacted or
becoming
effective
after the
date hereof,
will not have
any effect.
Cabinet Approval of Cabinet Project 20.03.201 N.A.
Approval the DPR of Secretariat, 4
the Project RGoB
Culture Clearance for Department Project 14.11.201 N.A.
Clearance implementin of Culture, 3
g the Project Ministry of
Home &
Cultural
Affairs, RGoB
Gewog NOC from Geog Project 15.02.201 N.A.
(sub- the Gewog Administratio 4
district) Administratio n Office,
Approval n Tangsibji
Geog, Tongsa
Dzongkhag,
RGoB
NOC from Clearance for Ministry of Project 19.03.201 N.A.
Departmen construction Works & 4
t of Roads of approach Human
roads for the settlement,
Project Department
of Roads,
RGoB
NOC from NOC for Bhutan Project 28.11.201 N.A.
BPC power Power 3
evacuation Corporation
arrangement Limited
s of the
Project
Environme Environment National Project 01.07.201 Valid upto The holder
nt clearance for Environment 4 11.08.2021 shall ensure
Clearance the Project Commission that import
69
and use of
second-hand
equipment
and
machineries
are strictly
prohibited.
Minimum
environment
al flow is
maintained.
Construction
activities at
Adit II
including the
first 100
metres Adit
length is not
carried out
from 10pm
to 6am.
Dzongkhag District Royal THELTHE 08.05.201 Obtaining
(district) Approval Government L 4 environme
Approval required as a of Bhutan, nt
part of the District clearance
pre-requisite Administratio
for getting an n – Trongsa
Environment
al Clearance
Forest and Refer table below
Park
Clearances
Forest and Park Clearances
Location Purpose and extent Granted by Granted Valid from Valid up to

to
Dam Site Submergence area Jigme Singye Project 21.01.2013 N.A.
Wangchuck National
Project 06.05.2014 N.A.
Park
Department of Forest Project 26.02.2014 22.07.2017
& Park Services
Drift Work Department of Forest Project 25.02.2014 22.07.2017
(underground), & Park Services
Permanent &
Temporary colonies,
70
Batching Plant,
Crushing plant, Muck
Diposal
Access Roads Department of Forest Project 24.04.2013 N.A.
& Park Services
Muck Diposal Department of Forest Project 26.02.2014 22.07.2017
& Park Services
Adit I Access road and Muck Department of Forest Project 25.02.2014 22.07.2017
Disposal & Park Services
Adit II Access road & Muck Department of Forest Project 05.03.2014 22.07.2017
Adit III Access road Department of Forest Project 30.06.2014 29.06.2015#
& Park Services
Muck Disposal & Project 24.04.2013 08.08.2017
Batching Plant
Adit IV Access roads & Muck Department of Forest Project 24.04.2013 08.08.2017
Batching Plant Project 26.02.2013 25.02.2014
(approval
renewed in
Feb 2014)##
Adit V Access roads to PH Department of Forest Project 24.04.2013 N.A.
and colonies & Park Services
Access roads Project 30.06.2014 29.06.2015#
Surge Shaft Access Roads & Muck Department of Forest Project 24.04.2013 08.08.2017
Batching plant Department of Forest Project 26.02.2013 25.02.2014
& Park Services (approval
renewed in
Feb 2014)##
Powerhouse Access roads Department of Forest Project 30.06.2014 29.06.2015#
& Park Services
Colonies, Batching Project 26.02.2013 25.02.2014
plant, Crushing plant (approval
& Muck Disposal renewed in
Feb 2014)##
Transmission Construction of Department of Forest Project 04.02.2014 No renewal
Line transmission line from & Park Services required as
Banglapokto to dam the
site for construction construction
power work has
been
completed
71
*Clearance renewed for further one year vide letter no ZFD/TECH/02/2014-15/1571 dated June 9,
2015 i.e. valid until June 8, 2016
#Clearance renewed for further one year vide letter no ZFD/TECH/02/2014-15/1494 dated May 20,
2015 i.e. valid until May 19, 2016
##Clearance renewed for further one year vide letter no ZFD/RAS/03-2/2016-17/73 dated 08.08.2016
i.e. valid until 08.08.2017
Based on the above table it can be seen that the validity of all of the permits and licenses has been
renewed.
72
13. Review of pre-disbursement conditions
Conditions Entura’s comments

1 The Borrower shall have ensured that the satisfactory arrangements Beyond Entura’s scope
for the entire equity and debt tie-up for the project are in place and
furnished satisfactory evidence to the. RTL Lenders that it is eligible
to draw the same.
2 The Promoter shall have infused 25% of equity upfront, at least 20% Beyond Entura’s scope
of which shall be from its own source (source other than ADB). The
Borrower shall have furnished satisfactory evidence apart from
certification by Statutory Auditor for such upfront infusion and that
from promoter's own source.
3 The Borrower shall have acquired and obtained possession of the Beyond Entura’s scope
entire land [except land relating to access road measuring not less
than 25.8 acres] required for project implementation and
executed the lease agreements pertaining to 195.262 acres prior to
the first disbursement. The status and title of the land shall be
reviewed by the LLC.
4 The Borrower shall have executed a Project Concession Agreement Project Concession
with RGoB duly listing out all the immovable properties/fixed assets Agreement signed
including Underground assets, and further ensuring incorporation
of the following (quoted) clauses in order to facilitate security
related rights to the lenders on all such immovable properties/fixed
assets of the company in terms of relevant sections of Movable and.
Immovable Properties Act, 199 of Bhutan.
RGoB hereby fully acknowledges, throughout its concession period,
the following rights of the company
a) a right to use or create security interest over the Project
Land use rights, all the Project Assets built and existing over
the Project Land and underground, for securing loans
availed by the Company for financing the Project as per
terms of the financing agreement that the Company may
enter into with its lender(s) for the purpose;
b) an uninterrupted right to use and hold in its absolute
possession and enjoyment the underground area of the
Project Land together with its Project Assets that .are built
and existing and facilities therein the underground area
and access thereto, regardless of whether the lease period
over the surface land of the project is continued or
discontinued.
c) An uninterrupted right to use and hold in its absolute
possession and enjoyment the Project Assets and facilities
that are built and existing on the surface of the Project
Land, together with all the easement rights there to
regardless of whether the Lease Period over the Project
Land or any of its part is continued or discontinued."
5 The Borrower shall have executed Land Lease Agreements Land Lease
ensuring incorporation of enabling clauses similar to those quoted Agreements executed
1
in the previous condition (No.4), to facilitate due creation of charge

on the user rights of the land leased under the lease agreement as
collateral/security to the project lenders/security trustee.
6 The Borrower shall have obtained an approval from NLC as required Beyond Entura’s scope
under Section 76 of the Regulation for Lease of Government
Reserved Forest Land and Government Land for creation of the
security on the underground project assets (including cavern and
tunnel system).
7 The Borrower shall have created security charge over user rights on Beyond Entura’s scope
the leasehold land of 195.262 acres (out of total envisaged land of
221.062 acres) in favour of lenders.
8 The Borrower shall have created security charge over all the Beyond Entura’s scope
immovable properties/fixed assets under Movable and Immovable
Properties Act, 1999 of Bhutan. All the other security also shall have
been created In favour of Lenders as per the Security Clause.
9 LIE shall have certified adequacy and suitability of Project land. LIE Entura has checked
shall have also opined whether returning back of part of project the adequacy and has
land (as per DPR) to government after completion of Project will found it in order. For
have any adverse impact on future operation/maintenance of the details refer Chapter
Project. Any concerns raised by the LIE in this regard shall be 11. Returning back of
resolved by the Borrower. part of project land
required only for
temporary
construction purpose
shall have no impact
on the future
operation/maintenanc
e of the project.
10 LLC shall have reviewed the arrangement for returning the land to Beyond Entura’s scope
government and shall have certified that the Lenders will continue
to have charge on all the immovable properties /fixed assets.
11 The Borrower shall have obtained the license for start of Bhutan Electricity
construction of the project from the Bhutan Electricity Authority issued
Authority.
license to THyE on 19th
November, 2014 for
construction of 118
MW Nikachhu Power
Plant. License shall be
valid for four
consecutive years
from the date of
issuance or till the
commercial operation
date, whichever occurs
earlier.
12 The borrower shall have executed PPA for supplying 335.04 Million Entura has reviewed
Units per annum for the first 12 years (approximately 68%) and the PPA and it satisfies
312.20 Million Units per annum from the 13th year onwards the requirement.
(approximately 62%) on take or pay basis and such PPA shall be
2
reviewed satisfactorily by LIE/ LLC.

13 Lenders shall have received satisfactory opinion from LLC in respect Beyond Entura’s scope
of Project agreements (including PPA) and security documents
(Legal Due Diligence Report).
14 The Borrower shall have made necessary modifications in the Beyond Entura’s scope
Articles of Incorporation of the Borrower, as required by the RTL
Facility lenders.
15 The Borrower shall have paid all fees, expenses and other charges Beyond Entura’s scope
due and payable by it under the Financing Agreements till the date
of drawdown
Request after of Financial Closure.
16 RTL Facility Lenders' Independent Engineer (LiE), RTL Facility Beyond Entura’s scope
Lenders Insurance Advisor (LIA) shall have been appointed by the
RTL Facility
Lenders
17 The due diligence reports from RTL Facility Lenders' consultants Beyond Entura’s scope
(LLC, LIE and LIA) on the Project should have been obtained and all
issues/ concerns raised therein shall have been addressed to the
satisfaction of the Lenders. Lenders will have the right to stipulate
additional conditions deemed fit as a result of the review of all
Project documents by LIE, LLC & LIA.
18 The Borrower shall have fully insured its assets which have been Beyond Entura’s scope
offered as Security for the Facility, against fire and all such other
appropriate risks including force majeure events as may be required
by the LIA/RTL Facility Lenders. Insurance policies would contain
suitable bank clause recommended b LIA
19 The Borrower and Promoter shall have executed undertakings as Beyond Entura’s scope
envisaged in the Term sheet. These enforceable the necessary shall
be legally enforceable.
20 The Borrower shall have obtained and maintained all required Entura has reviewed
regulatory, statutory and non-statutory clearances, as applicable to the required
start the construction of the Project and agreed to comply with all regulatory, statutory
the conditionality’s of these clearances/ approvals. LIE shall have and non-statutory
reviewed the position of various statutory and regulatory clearances clearances, and found
and have certified the adequacy and validity of the same with all his them in order.
concerns addressed to the satisfaction of RTL Facility Lenders. However the validity
of most of the permits
and licenses has
expired and THyE has
clarified that the
renewal is in process.
Refer Chapter 12 for
details.
21 Information on actual expenditure incurred on the Project as well as Beyond Entura’s scope
the sources of same duly certified by statutory auditors of the
Company shall be submitted.
22 The RTL Facility Lenders shall have received the final copies of the Entura has reviewed
3
Construction schedule, copies and related contracts, the the overall cost,
Construction Budget and Disbursement Schedule, in accordance schedule in relation to
with the Base case, as agreed between the Borrower and the the contract
relevant contractors duly certified by LIE. The Borrower shall agreements and it is
ensure that overall costs of all the Project Contracts/ found to be in order.
Agreements, are in line or on better terms as assumed in the Base For details, refer
Case. chapter 6 and 9.
23 The Borrower shall have opened a Trust & Retention Account (TRA) Beyond Entura’s scope
into which the Borrower shall deposit all its cash inflows from the
Project to be utilized/ applied in a manner and priority to be
stipulated in the TRA
24 The Borrower shall have undertaken that all representations and Beyond Entura’s scope
warranties which are made till the date of first drawdown are
true in all material respects.
25 The Borrower shall ensure that it obtains a confirmation from Beyond Entura’s scope
LIE/LLG (corresponding to their respective scope of work) that all
conditions precedent to initial disbursement have been complied
with and the Borrower has achieved financial closure.
26 The Borrower shall have obtained approval for Right CL Way for Right of way for
Transmission line from National Environment Commission. The construction of
Borrower shall ensure that that the contract for Transmission Line Transmission line from
by Bhutan Power Corporation, on a fixed time fixed price basis, shall National Environment
be awarded within 6 months from first disbursement under the Commission is
Project. The LIE shall review the same. available. However
one MoU has been
signed with BPC for
construction of 132 kV
double circuit
Transmission line
based on actual plus
10% charges.
27 The Borrower shall have furnished a confirmation from the Bhutan Beyond Entura’s scope
Power Corporation to the satisfaction of RTL lenders that adequate
transmission capacity is already available/Will be created before
dated before 30.06.2018 in the Mangdechhu-Goling-Jigmeling
transmission corridor to evacuate power from the Project and the
Company is permitted to use such capacity in the corridor.
28 LIE shall have reviewed the proposed evacuation arrangement and Evacuation
agreements, if any, executed.in this relation and any concerns arrangement & MoU
raised by LIE shall be resolved to the satisfaction of RTL Facility signed between THyE
Lenders prior to the first disbursement. & BPC and applicable
clearance reviewed
and found to be in
order.
29 The Borrower shall undertake to coordinate/put in place the Beyond Entura’s scope
necessary infrastructure arrangements for evacuation of power up
to the Indian Border at least 6 months prior to the SCOD of the
Project
4
30 The Borrower shall have appointed the Owner's Engineer for the THyE has appointed
Project. The arrangements/scope of work shall be reviewed by LIE SMEC as Owner’s
and the company undertakes to incorporate any Engineer. The
changes/amendment suggested by LIE to the satisfaction of Contract/ scope of
Lenders. work is being
reviewed.
31 The Borrower shall have executed fixed price-fixed time THyE has entered into
supply, erection procurement and commissioning contracts and the fixed price-fixed
shall have also entered fixed price fixed time contract for civil time contracts for civil
works and evacuation arrangement included in scope of Project works with HCC &
fixed price-fixed time
supply, erection,
procurement and
commissioning
contracts with Voith.
32 LIE shall vet the Project cost, contracts for supply of major Project cost, contracts
equipment - including EPC contracts for Civil & Hydro-Mechanical for supply of major
and Electro Mechanical works, transmission line contract etc. equipment - including
including the scope of the contracts, implementation schedule, EPC contracts for Civil
provisions for liquidated damages and performance guarantees etc. & Hydro-Mechanical
LIE shall also examine reasonability of the contract prices. The and Electro
performance parameters should be better or in line with the Base Mechanical works,
Case. LIE shall also review the arrangement for overall project transmission line
management. Concerns raised by LIE shall be addressed by the contract etc. including
Borrower to the satisfaction of the Lenders. the scope of the
contracts,
implementation
schedule, provisions
for liquidated damages
and performance
guarantees etc.
reviewed.
Reasonability of the
contract prices
examined. Details of
Entura’s
observations are in the
report.
33 LIE shall have reviewed the credentials of the contractors for the Credentials of the
various packages and any issue raised by the LIE shall have been contractors reviewed
resolved. In case the credentials of the contractors are not found and Entura finds them
acceptable to the RTL Facility Lenders, RTL Facility Lenders reserve capable of delivering
the right to stipulate any other condition or to revoke its sanction of the work.
credit facilities
34 LIE shall have confirmed that equipment to be utilized by the Equipment proposed
company is suitable for the Project to be utilized by the
company is suitable
for the Project.
However details shall
5
be reviewed during
detailed Engineering.
35 The Borrower shall confirm that there is no Event of Default which Beyond Entura’s scope
has happened and has not been cured or waived in accordance with
the terms of the relevant Project Agreements/Finance
documents, and all representations and warranties made by the
Borrower in each of the Project Agreements/Finance documents are
true or correct.
36 Any provision contained in any document by which the Borrower is Beyond Entura’s scope
bound, or any law, rule or regulation directly or indirectly shall not
restrict the Borrower's borrowing power or authority or ability to
borrow the Loans from the Lender(s).
37 Hydrology report shall be vetted by LIE prior to first disbursement Hydrology report
and) in case of any material concern raised by LIE e.g. decrease in reviewed and no
expected generation etc., the RTL Facility Lenders reserve the right concerns in respect of
to stipulate any other condition as deemed necessary. hydrology are
foreseen. For details
refer Chapter 3
38 LIE shall have reviewed the assumption made for O&M cost and in O&M arrangement
case if the LIE is of the opinion that expected O&M cost for the reviewed and no
Project is higher than the assumed O&M cost, the debt equity ratio issues are foreseen.
for the Project shall be revised in such a manner that the DSCR For details refer
levels as per the Base Case are restored. Chapter 10
39 A suitable arrangement by way of a Tripartite Agreement or any Beyond Entura’s scope
other mode acceptable to RTL Lenders shall have been made
facilitating PTC India Limited to remit out of power off-take
proceeds payable to the Company, an amount equivalent to
outstanding over dues (as advised by the RTL lenders) of RTL
Lenders directly to them.
40 TRA Agent shall have been appointed through due execution of the Beyond Entura’s scope
TRA Agreement and all TRA accounts relating to construction phase
as detailed under TRA Agreement shall have been opened by the
Borrower with TRA Agent
The Borrower shall:
41 Have constituted (a) a Project management team comprising Beyond Entura’s scope
of its directors/executives for supervising and monitoring the
progress of implementation of the Project and (b) and Audit Sub-
Committee of the Board for monitoring the Company's operations
and its compliance with corporate governance norms.
42 Have removed the directors, whose names appear in Wilful Beyond Entura’s scope
Defaulters' list of RBIICIBIU Credit Information Bureau of Bhutan
Defaulter list from its Board, or get their names deleted from the
List.
43 Agree that lenders shall have the right to appoint other consultants Beyond Entura’s scope
in case there is a cost/time over run. The expenses related to such
appointment shall be borne by the Borrower.
44 Agree that the working capital margin will be released only close to Beyond Entura’s scope
6
the COD for build-up of the working capital requirements.

45 Have finalized the plans for the O&M arrangements to be put in O&M arrangement
place for the Project. The plans to be reviewed by the LIE reviewed and no
issues are foreseen.
For details refer
Chapter 10
46 Agree that adequate arrangement for O&M of the Project, including Beyond Entura’s scope
inter alia, recruitment of qualified and experienced manpower,
training of personnel shall be made.
47 Have furnished an undertaking that Borrower and all other Beyond Entura’s scope
contracted parties have complied with all the conditions precedent
in all other Project documents and in various statutory & non-
statutory clearances/ approvals of the Project.
48 Have confirmed that no event has occurred which is likely to have Beyond Entura’s scope
an adverse effect on the Project.
49 Have got the tax and accounting provision assumed in the Base Beyond Entura’s scope
Case vetted and confirmed by the Statutory Auditor (empaneled by
Royal Audit
Authority of Bhutan) In case of any adverse material deviation from
base case assumptions, the RTL lenders may stipulate such other
conditions as may be required.
50 Have obtained consent from Ministry of Economic Affairs (owner Beyond Entura’s scope
of Mangdechhu Hydropower project) for discharging water in the
reservoir of Mangdechhu Hydropower Project.
71
7
8
9
14. References
Refer to the ‘Style Guide‘ on myhydro for the correct format for presenting references.
11
Appendices
13
A Appendix heading
A.1 Appendix heading 2
B Appendix heading 3
Annexure

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©Entura. All rights reserved.

Document title KUTEHR HYDROPOWER PROJECT

Distributed to Client contact State Bank of India

Development of a hydropower project in Bhutan requires obtaining permits from a number of

2. Site visit and review of current project status 3

4. Review of Power Potential 16

5. Review of Project components 19

5.9 Power house 24

6.4.4 Contract price and its reasonability 39

8. Review of construction and disbursement schedule 49

8.4.5 Head Race Tunnel 54

9. Review of Project cost 59

10. Review of Operations and Maintenance cost & arrangements 63

11. Review of Acquired Project Land 64

12. Review of Approvals & clearances 68

13. Review of pre-disbursement conditions 1

Figure 2.2: Access road to intake and diversion tunnel portals 4

Figure 2.3: View of left abutment of Dam 4

Figure 2.4: View of Drift on left bank along Dam Axis 5

Figure 2.5: View of Temporary site office, residential buildings 5

Figure 2.6: Access road to adit-1 6

Figure 2.7: Access road to adit-2 7

Figure 2.8: View of Adit-3 Portal 7

Figure 2.9: View of Adit-4 portal 8

Figure 2.10: Access road to adit-5 8

Figure 2.11: View of adit portal to surge shaft 9

Figure 2.12: View of intermediate adit portal to pressure shaft 10

Figure 2.13: Access road to powerhouse complex 10

Figure 2.14: Outlet portal of main access tunnel 11

Table 4.1: Power Potential Study of 90% Dependable year 1993-1994 18

Table 5.1: Percentage of rockmass class along HRT 22

Table 11.1: Status of Land Acquisition for works except access roads 64

Table 11.2: Status of Land Acquisition for access road 67

1.1 Project features

The project is envisaged the following components and features:

1.2 Project accessibility

2. Site visit and review of current project status

2.2 Civil Works

2.2.1 Diversion Tunnel, Dam and Intake

Figure 2.2: Access road to intake and diversion tunnel portals

Figure 2.3: View of left abutment of Dam

Figure 2.4: View of Drift on left bank along Dam Axis

Figure 2.5: View of Temporary site office, residential buildings

2.2.2 De-silting Arrangement

2.3 Head Race Tunnel

Figure 2.6: Access road to adit-1

Figure 2.7: Access road to adit-2

Figure 2.8: View of Adit-3 Portal

Figure 2.9: View of Adit-4 portal

Figure 2.10: Access road to adit-5

2.4 Surge Shaft

Figure 2.11: View of adit portal to surge shaft

2.5 Pressure Shaft

The approach road to access intermediate adit is complete.

Figure 2.12: View of intermediate adit portal to pressure shaft

2.5.1 Power House Complex

Figure 2.13: Access road to powerhouse complex