00 executive summary 14.5mw jul07 nea

8/12/2019 00 Executive Summary 14.5MW Jul07 NEA

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SANIMA HYDROPOWER (P.) LIMITEDChapali, Bishnu VDC, G. P.O.Box. 19737 Kathmandu, Nepal

14.5 MW MAI HYDROPOWER PROJECT

FEASIBILITY STUDY

EXECUTIVE SUMMARYCOMMENTS FROM NEAINCORPORATED)

June, 2007

SANIMA HYDROPOWER (P.) LIMITED.

Engineering DepartmentChapali, Bishnu VDC; G. P.O.Box. 19737 Kathmandu, Nepal


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SANIMA HYDROPOWER (P.) LIMITEDChapali, Bishnu VDC, G. P.O.Box. 19737 Kathmandu, Nepal

MAI HYDROPOWER PROJECT

FEASIBILITY STUDY

Quality control Signature DatePrepared by: TPP

Checked by: HSS

Approved by: SDS

EXECUTIVE SUMMARYCOMMENTS FROM NEAINCORPORATED)

June 2007Ashadh 2064

SANIMA HYDROPOWER (P.) LIMITED.Engineering Department

Chapali, Bishnu VDC; G. P.O.Box. 19737 Kathmandu, Nepal


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Sanima Hydropower (P.) Limited Mai Hydropower ProjectFeasibility Study: Executive Summary (Revision-A)

i

Table of Contents:

SUMMARY ....................................................................................................................................... 1SALIENT FEATURES ...................................................................................................................... 21. PROJECT BACKGROUND .................................................................................................... 42.

THE PROJECT AREA ............................................................................................................ 4

3. FIELD INVESTIGATIONS ...................................................................................................... 54. BASIC STUDIES .................................................................................................................... 7

4.1 HYDROLOGY AND SEDIMENT STUDY.................................................................................... 74.2 POWER MARKET ................................................................................................................. 84.3 GOVERNMENT POLICY ......................................................................................................... 84.4 GEOLOGICAL AND GEOTECHNICAL STUDIES ........................................................................ 94.5 SEISMICITY........................................................................................................................ 124.6 MASS WASTING STUDY ..................................................................................................... 12

5. PROJECT LAYOUT ............................................................................................................. 126. OPTIMIZATION .................................................................................................................... 137. PHYSICAL DESCRIPTION OF THE PROJECT ................................................................. 148. ENVIRONMENTAL IMPACTS AND MITIGATION .............................................................. 189. CONSTRUCTION SCHEDULE AND COST ........................................................................ 19

9.1 ACCESS ROAD .................................................................................................................. 199.2 CAMPS AND FACILITIES ..................................................................................................... 199.3 CONSTRUCTION POWER.................................................................................................... 209.4 CONTRACT PACKAGE ........................................................................................................ 209.5 PROJECT IMPLEMENTATION SCHEDULE ............................................................................. 209.6 COST ESTIMATE ................................................................................................................ 209.7 DISBURSEMENT SCHEDULE ............................................................................................... 22

10. PROJECT OUTPUTS AND BENEFITS ............................................................................... 2211. PROJECT EVALUATION ..................................................................................................... 2312. CONCLUSION AND RECOMMENDATIONS ...................................................................... 24

12.1 CONCLUSIONS................................................................................................................... 2412.2 RECOMMENDATIONS ......................................................................................................... 25

List of f igures:

Figure 1: Project Location MapFigure 2: Project Area MapFigure 3: Project Layout

Figure 4: Headworks General ArrangementFigure 5: Powerhouse General ArrangementFigure 6: Tailrace General ArrangementFigure 7: Single Line Diagram at Delivery PointFigure 8: Implementation Schedule


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Summary Report, Revision A (NEAs comments incorporated)-1

SUMMARY

Mai Hydropower Project (MHP) was identified by Sanima Hydropower (P.) Ltd. following areconnaissance study under taken by the company in 2004. After obtaining the survey licencefrom Government of Nepal (GoN) a detail study was carried out to determine the feasibility ofthe project. This feasibility report is the outcome of the continuous and untiring efforts put upby the staff of the company spanning several years of experience.

The project site is located at a distance of 30 km north from Birtamod in East-West Highway.Headworks of the project is located on the Mai Khola between the boarder of two VillageDevelopment Committees (VDCs) namely Chisapani and Soyak in Ilam District. Right bank ofthe diversion dam lies in Soyak VDC of Ilam district. The powerhouse site is located atMusekhop village approximately 4.5 km upstream from the confluence of the Lodhiya Kholaand Mai Khola in Danabari VDC of Ilam district.

Initially, in June 2006, MHP was proposed as a daily peaking run of river project with installedcapacity of 20.1 MW (2x10.05 MW) with design discharge of 21.4 m 3/s and net head of 108.9 m.As the NEAs requirement on peaking hour supply Project is of no significance at present (whenthe base dement is not met) and there is no adequate exercise neither from the Government norfrom NEA side to propose the peak hour energy price, NEA side asked to propose the simple

run-of-river plant. The optimization study carried out by the company showed that the least costoption for the simple run-of-river scheme at the proposed Mai Khola location is the 14.5 MW run-of-river Project. This report summarizes the outcome of the study for the 14.5 MW simple run-of-river scheme and further addresses the settled technical parameters, the cost and energyfinalized by both NEA and SHPL side during the technical review of NEA and has been the basisfor negotiating the energy rates for Power Purchase Agreement (PPA) with NEA.

The 14.5MW MHP is technically feasible and posses characteristics very desirable for theINPS system by serving to reduce technical loss, improve the voltage profile and power supplyscenario in the region. In addition, this Project will help to reduce the operation of theexpensive thermal power to some extent and dependency on Indian system for the EasternNepal. The Projects proximity to the power-hungry Eastern load center of Nepal will be the

biggest attraction of NEA.

Headworks of MHP on the Mai river, located just downstream of the Soktim Tea State divertswater through a 2172 m long headrace tunnel and 474 m long exposed penstock pipe to thesemi-surface powerhouse and generates 14.5 MW through two vertical axis Francis turbinesthen water will be discharged to Lodhiya khola through 1370 m long stone masonry tailracecanal and 225 m long tailrace pipe.

The project cost on the basis of unit rates as applicable on March 2006 is NPR 1941.8 millionbefore interest during construction. The gross energy production is 98.53GWh (Poush toChaitra = 20.98 GWh and Baisakh to Marg = 77.55 GWh). At the delivery point of NEAsAnarmani substation, the net energy to be supplied is 88.440 GWh per annum with doublecircuit 33kV transmission line.

The project is financially viable at an average energy rate of 4.48NPR/kWh (lower rates ascompared to the existing energy rates of the private sector power plants with simple run-of-river schemes of this range) in base year of 2006 and the escalation as described below.

Base case financial evaluation shows that the NPV of the Project is 1283 million NPR, theinternal rate of return is 17.52% and Benefit to Cost ratio is 1.54. Further, the NPV ofgovernment takes (as a royalty and tax takes) is also as high as NPR 761 million. The returnon equity is 24.58%. These parameters are as presented below:


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Financial Parameters Base-Case At 110% cost and 90% revenue

NPV, MNPR 1,283 862

IRR% 17.52% 14.87%

B/C-ratio 1.54 1.36

RoE, % 24.58% 19.30%

NPV-Govt takes, MNPR 761 641

Since the hydropower project involves many risk factors, return on equity less than 20% will bevery risky for the investor to invest into hydropower projects. The above financial parametersare resulted from the average energy price as tabulated below:

Year2006 07 08 09 10 11 12 13 14 15 16 17 18 19202

0202

1

NPR4.48/kWh 4.75 5.02 5.29 5.56 5.82 5.97 6.12 6.26 6.41 6.55 6.70 6.84 6.99 7.13 7.28Commercial operation is envisioned in the end of year 2010.

SALIENT FEATURES

Location: Danabari and Chisapani VDC, Ilam District, Eastern

Development Region of Nepal

Purpose of Project: To supply for domestic use by connecting to national

grid

Hydrology:

Catchment Area 589.0 km2

Average Flow 32.66 m3/s (minimum monthly flow 7.22 m3/s)

Design Flow 15.40 m3/s (50.31% ecceedance flow)

90% Exceedance flow 7.48 m3/s

Design Flood (Q100) 3590 m3/s

Diversion Dam:Type Concrete gravity dam

Slope Ogee-profile

Crest Elevation 316.0 m above msl

Crest Length 133.0 m

Maximum height 7.0 m

River Diversion During Construction:

Alignment Along the river channel

Diversion flow 250 m3/s

Coffer dams Two cofferdams facilitating stage1 and stage2

concreting (Total coffer dam length=660m)Spillway:

Type Over-flow weir with under-sluice (2x8m width)

Crest Elevation 316.0 m above msl (undersluice 311.0 m above msl)

Maximum Flood Level 322.5 m above msl

Length 133.0 m

Design Discharge 3590 m3/s

Intake:

Type Side Intake, submerged orifice


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Number of Orifices 4

Bottom Elevation of Orifice 313.5 m above msl

Top Elevation of Orifice 315.5 m above msl

Length of Orifices 3.0 m

Gravel Trap:

Type Convensional flushing, Single chamber

Top elevation 317.75 m above msl

Average Height 6.2 m

Average Width 14.0 m

Side spillway crest elevation 316.0 m above msl

Spillway length 20 m

Settling Basin:

Type Convensional flushing

Number of Chamber 3 (Three)

Top elevation 316.30 m above msl

Normal Operation elvation 315.80 m above msl

Length of the basin 70.3 m

Average Height 5.25 m

Average Width per Chamber 8.25 m

Headrace Canal:

Type Trapezoidal, Stone masonary with concrete lining

Length 775 m

Height 2.5 m

Bottom width 2.5 m

Longitudinal slope 1:1500 (Vertical:Horizontal)

Side slopes 1:1 (Vertical:Horizontal)

Headrace Tunnel:

Length 2172.0 m

Dimensions Inverted D 3.8x3.8m, (13 m2-finish)

Discharge 15.40 m3/s

Surge Tank dimensions:

Type Vertical, circular section

Height 28.0m

Diameter 6.0m (finish)

Penstock

Length 474m

Diameter/thickness 2.35 m internal dimeter/10 mm to 28 mm thickness

Power Facilit ies:

Powerhouse Type Semi-surface

Dimensions 27.0 m x 22 m

Gross Head 117.0 m (316.0 199.0 m above msl)

Net Head 109.58 m

Installed capacity 14.5 MW (2x7.25MW)


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Annual Net Energy Output 88.44 GWh

Tailrace Canal:

Type Trapezoidal, Stone masonary with concrete lining

and steel pipe

Length 1370 m canal and 1.5 dia pipe 225 m

Height 1.5 m

Bottom width 1.5 m

Longitudinal slope 1:100 (Vertical:Horizontal)

Side slopes 1:1 (Vertical:Horizontal)

Transmission Facilities:

Transmission line length 24 km

Voltage level 33 kV, double circuit

Project Cost: 2,125 million NPR (29.52 million USD),

Economic and Financial Indicators:

Benefit cost ratio (B/C Ratio) 1.54

Internal Rate of Return 17.52%

NPV Government takes (as a

tax and royalty)

761 million NPR

Net Present Worth 1283 million NPR

Cost per kW ins talled Capacity 2,036 USD/kW

1. PROJECT BACKGROUND

On 14 May 2005 Sanima Hydropower (P) Ltd. (SHPL) obtained feasibility study licence for MaiHydropower Project (MHP) from the Department of Electricity Development (DoED) of Ministryof Water Resources (MOWR), Government of Nepal. This study was then focused to assess

the feasibility of the 13.4 MW Run-of-River project optimizing possibility for daily peakingarrangement to contribute to acute peak-load crisis in the National Grid during dry months.

SHPL has submitted the complete techno-economic feasibility study of 20.1 MW daily peakingRoR to NEA on June 2006. The presentation of the feasibility study proposal to NEA wasmade on July 2006 at the NEA office, Ratnapark, Kathmandu. NEA side then responded thatat present when NEA is facing difficulties to supply base load, adding the project with dailypeaking capacity in the system will not be beneficial to NEA. Therefore, in accordance with theNEAs view, SHPL has made this revision for the simple run-of-river scheme with 14.5 MWinstalled capacity.

2. THE PROJECT AREA

The projects headworks is situated on the Mai Khola between the boarder of two VillageDevelopment Committees (VDCs) namely Chisapani and Soyak in Ilam District. Right bank ofthe diversion dam lies in Soyak VDC of Ilam district. The powerhouse site is located atMusekhop approximately 4.5 km upstream from the confluence of the Lodhiya Khola and MaiKhola in Danabari VDC of Ilam district. The intake structures, gravel excluder, headrace canal,settling basin and balancing pond are placed on the left bank of the river at Gunmune villagejust downstream of the Soktim Tea Garden of Chisapani VDCs. From Gunmune, headracetunnel starts and runs across the hill passing the boarder of Chisapani and Danabari VDC. Thesurge shaft area, penstock, powerhouse and outdoor switchyard are located in Danabari VDC.Tailrace canal is placed along right bank of Muse Kholsa and water will be discharged intoLodhiya Khola from where it drains into Mai river.


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Mai river is one of the tributaries of the Kankai Mai River. The proposed intake of the projectlies at approximately 875333.64 E longitude and 26 49 11.9 N latitude and at an elevationof 315 m. The powerhouse is located at approximately 87 53' 2.01 E Longitude and 26 4730.0 N Latitude and at an elevation of 200 m. The catchments area of this project is 589 sq.km. The major tributaries of Mai river upto the location of headworks are Mai, Jog Mai andPuwa Mai. Deo Mai is also one of the major tributaries which meets Mai river at approximately8 km downstream of the proposed headworks area. After the confluence of Deo Mai, Mai riveris named as Kankaimai Nadi.

The area lies in the Siwalik Zone, immediately south from the boundary with the LesserHimalaya. The predominant rock types are sandstone, siltstone and mudstone. The area ismostly covered with forest and cultivated land and tea gardens in the surrounding. Theweathered depth of Siwalik rock provides necessary environment for forest and plants.

The proposed MHP lies in sub-tropical & temperate climate zone. The average annualtemperature varies from 5.50C in winter to 290C in summer. The average annual rainfall in thisregion is about 1545 mm.

The main access point to the area is at Birtamod of Jhapa district along the East-WestHighway. District headquarters are located in Ilam Municipality, some 77 km north-east fromBirtamod along the Mechi Highway. The primary means of access to MHP site is the fairweather road from Birtamod (Jhapa), via Sanischare, khudunabari, Shukhani jungle, GaruwaSukrabare, Sitali to Musekhop (Danabari VDC) at powerhouseabout 25 km long. This road isblack-topped up to Khudunabari (approximately 9 km) and rest of the portion is earthen. Theaccess to headworks site is along the same road up to Soktim Village and another 1.5 kmdownhill along the existing road.

There are two tea processing industries in the project area. One is located at Soktim, the otheris at Chilinkot. No electricity supply system exist in the area. But at some places of projectsurrounding, an 11 KV transmission line from Phikkal Bazar of Ilam district comes primarily toprovide energy for tea processing factory. Regulated and well managed system of

infrastructures for water supply has not been noted in the area.

The area is relatively accessible. No communication system does exist in the area. Thenearest town with communication facility is Khudunabari. However, the mobile telephonesprovided by the Nepal Telecommunications Corporation do work in the project area.

Most families in the project area are subsistence farmers, growing crops and rearing mostlypigs, goats, chickens, cows and buffaloes. Some people specially living in Soktim, KanchhiKaman, Lebartol and Chilingkot work as unskilled and semi skilled workers in the tea estatesaround the project area. In the recent a large number of young people from the project areaare going to the overseas, specially Malasiya and Arab nations searching for employmentopportunities.

Settlements in the project area are mostly clustered. Banana, broomgrass (Amriso), gingers(Aduwa) are the most common agro-products which are widely collected in the area andsupplied to Silgadi, India. Kerosene, rice, sugar, soap, cloth, medicine, stationary goods, ironproducts, fast food (Chau-chau / biscuits), spices, cigarettes, chewing tobacco and Gutkha arethe major commodities being imported into the villages of the area from Birtamod. The averageliteracy of the area is 50% out of which around 60% are male and 40% are female.

3. FIELD INVESTIGATIONS

Surveying


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The topographic survey work covering headworks area, tunnel portal and surge tank area,penstock pipe alignment, powerhouse and switchyard locations, tailrace and approximately4km length of the tail-water escape corridor upto Mai Khola was performed.

Hydrological InvestigationsThe daily climatological/precipitation data as well as hydrological data (daily flow records and

sediment data) were collected from the existing stations of Department of Hydrology andMeteorology, GoN. Rajduwali and Mainachuli (Gauging Station no. 728 and 795) were used forthe hydrological analysis. Further to this Revision A, the mean monthly flow was derived fromthe direct catchment correlation of Rajduwali station. This was adopted because of thefollowing two reasons:

The catchment area at Rajduwali station is 377 km2(Elev. Approx. 350m amsl) and thatof Puwa Khola at Puwa intake is 107 km2which is together 484 km2 and is more by80% of the catchment area at proposed Mai intake at Elevation 310m amsl,

The proposed intake is close to and at lower elevation and has similar catchmentcharacteristics.

A staff-gauge was installed at the intake location and gauge height readings are takencontinuously from May 2005. The established gauging station at the intake site is being

calibrated by using current meter to derive the rating curve of this location. Being the shortmeasurement period, the observed data were not interpreted. Observed data are in the lowerside.

Sediment InvestigationsAvailable data and sediment records were collected. The data were compared with othersimilar catchments and river basin. No major mass-wasting and big land slides were observed.

Field sediment gauging program was carried out to supplement the available information onsediment. The sediment samples were collected from May 2005. The sediment analysis hasbeen carried out for the collected samples in laboratories in Kathmandu.

Geological and Geotechnical InvestigationsGeological and geotechnical investigations were carried out to establish geological settings,determine detailed geological and geotechnical conditions of the project area as well asfoundation conditions of the weir and the powerhouse area. The tunnel support and tunnelconstruction cost is highly dependable on geological conditions of the proposed alignment. Topredict the costs and support works the investigations along the tunnel portal area, surge shaftand critical tunnel section area were also carried out.

The data and maps were collected to initiate geological and geotechnical investigations. Thesurface geological mapping was first carried out and two dimensional Electrical ResistivityTomography (ERT) survey was carried out to assess the depth, extent and quality ofsubsurface material types present in the project area. A total of 13 nos. of 2D ERT profilessumming to approximately 3 km length were investigated.

Electrical resistivity using mise-a-la-masse method was employed to find out the velocity andflow direction of the ground water around two boreholes in diversion weir.

All together 8 test pits were dug at the location of proposed structures. In-situ condition of thematerials was logged, samples were collected and analysed to assess material property forfoundation and construction suitability.

The assessment of rock types found in the area were made in relation to their strength andmineral contents. For this several samples of sandstone, mudstone and siltstone werecollected from the field and tested in the laboratories in Kathmandu.


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Surveys for Coarse Aggregate, Sand and Impervious MaterialsThe construction material investigation included identification of borrow areas, test pitting,sample collection and laboratory testing.

Different locations for construction materials such as cohesive soil (red clay), fine and coarseaggregates were identified within the permissible haulage distance from the project area.

There are vast alluvial plains of Mai Khola and Lodhiya Khola. Several patches of red clay arealso found within reasonable lead distance. The quantity of available material far exceedsthan actually needed for MHP implementation. The collected materials were checked atlaboratory in Kathmandu and satisfactory results were obtained.

4. BASIC STUDIES

4.1 Hydrology and Sediment Study

The flow duration data has been correlated from the Rajduwali station-Station No. 728 of DHMin Kankaimai River. The design discharge of 15.4 m3/s falls on 50.31% exceedance flow and ispresented in the flow duration curve below:

Flow duration curve

0

10

20

30

40

50

60

70

80

90

100

0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100

Exceedence of time (%)

Discharge(m3/s)

The mean monthly flow was derived from the Rajduwali station-Station No. 728 of DHM in MaiRiver. The average long-term mean monthly flow is as follows:

MonthJan

Feb

Mar

Apr

May

June

July

Aug

Sept

Oct

Nov

Dec

Discharge, m

3/s 8.95 7.56 7.22 9.16 15.64 38.14 85.16 80.90 76.94 33.14 16.20 10.86

The average minimum monthly flow is 7.22 m3/s.

The flood frequency analysis gives the following magnitude of floods with corresponding returnperiod:Return period: years 5 10 50 100 1000Maximum Floods, m3/s 1411 1932 3100 3598 5247

90% exceedance flow = 7.48 m3/s65% exceedance flow = 10.69 m3/s50.31% exceedance flow = 15.40 m3/sDaily Maximum Discharge (October to May) =248.83 m3/s


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The design discharge has been adopted as 15.4 m3/s which is 50.31 percentile exceedanceflow. The construction flood for coffer dam has been adopted as 250m3/s which is maximumdaily flow during the period of October to May for the recorded interval. The design flood hasbeen taken as 3590m3/s.

The ecological flow release from diversion dam to preserve the ecosystem of Mai Khola isdetermined to be 0.722 m3/sec (10% of the minimum monthly flow (the minimum monthly flowshall be verified by observing the low flow in the coming years at this intake location). This isconsidered satisfactory because it is augmented by the discharge of Deomai river after 8 kmfrom the intake, which is about 1.2 m3 /sec in dry season. This will keep the project eco-friendly. This flow has been deducted from the mean monthly flows for power and energyestimation when the flow in the river is less in the dry months to ensure this flow at all the timethrough the river.

The specific sediment yield value adopted for Mai Khola is 2670 tonnes/Km2/year. The annualsediment transportation through the weir is 1566740 tonnes. The average sedimentconcentration is around 5600 ppm. The sediment concentration adopted for the design of thesettling basin is 8,000 ppm. Field sediment gauging program was carried out to supplementthe available information on sediment. The sediment sampling result shows that maximumsediment concentration observed was 1052 ppm in August 2005 for this study year. Thedistribution is such that the sediment is consisted about 90% of silt and 10% of silty clay. Thespecific gravity of sediment is about 2.73 and the percentage of hard mineral is 57%. Furthersediment study is being carried out in year 2006, results have not yet been adjusted.

4.2 Power Market

In Nepal, the growth in electricity generation capacity has not been adequate enough to meetthe ever increasing demand. The gap between demand and supply is widened even furtherduring the dry season of each year when flow of rivers plummet down to the lowest level givingrise to desperate measures of long hours of load shedding as is the case at this time. Thedemand for electricity is fueled by rapid urbanization particularly in the Terai belt and lower

hills, expansion of distribution network, enhancement in living standard catalyzed by flow ofremittance, and other factors.

On the other hand, the ongoing political instability coupled with financing and other problemshas hindered the development of hydropower so that hardly few Mega Watts gets added per 2-3 years period, whereas, about 60-70 MW addition is required each year to keep pace with thedemand. According to load forecast of NEA, the capacity demand is expected to grow by about8% each year. With the changes in political situation and approaching peaceful environmentahead, the demand of electricity will rise even by 100MW per year.

The Eastern region has many promising load centers. Ilam is a burgeoning town with teaestates and bright prospects for tourism industry. The district headquarters of Eastern zonehave already been connected to the grid with 33 kV lines. Rural distribution lines are being

expanded to the hinterlands each year thereby increasing the electricity demand of the region.The network size already developed in the region supports additions in generating capacity inthe region without requiring the power to be transported to farther load centers forconsumption. That means Mai Project is very desirable also from the perspective of lossreduction for NEA. This Project will replace the expensive thermal power to some extent andeven reduce dependency on Indian system for the Eastern Nepal. Realization of Maihydropower project will help rapid industrialization of the power hungry eastern Terai belt ofNepal. Hence this project is very important for the national economy as well.

4.3 Government Policy


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Export of hydropower has been stated to be one of the objectives of development in theHydropower Development Policy 2001 of Nepal. The Policy provides for both the bilateral andregional cooperation in such development efforts with a view to lend support to the growth ofthe region's economy. The private sector is highly encouraged to participate in such regionalprojects. The approach paper of the current Tenth Plan (Fiscal Year 2003 -2007) reiterates theabove policies of developing regional projects and encouraging private sector in such efforts.The Water Resources Development Strategy 2002 projects that by 2027 under high growthscenario the country will have developed a total hydropower capacity of 22000 MW including15000 MW for export.

Repatriation Facili tyAs per the Foreign Investment and Technology Transfer Act,1992, a foreign investor makinginvestment in foreign currency shall be entitled to repatriate the following amounts outsideNepal:

The amount received by the sale of the share of foreign investment as a whole or anypart thereof,

The amount received as profit or dividend from foreign investment,

The amount received as the payment of principal and interest on any foreign loan,

The foreign investor or a foreign technology supplier is also entitled to repatriate the

amount received under the agreement for the technology transfer in such currency asset forth in the concerned agreement as approved by the Department of Industries ofHMGN.

Concession (License) PeriodThe license is provided to the hydropower developer on BOOT (Build, Own, Operate andTransfer) basis. Study License is provided first (if the developer intends to carry out thefeasibility study) for maximum 5 years period then the generation licence is issued after thedeveloper concludes the Financial Closing of the Project. The license period for BOOT projectsis as follows:

For hydropower projects supplying the internal demand, the concession period is 35years,

For export-oriented hydropower projects, the concession period is 30 years from the

date of issuance of the generation license, For storage projects, the term of the generation license may be extended for a

maximum period of five years on the basis of the construction period.

Royalties The government royalty-take for this scale of project to connect to national grid for domesticsupply is NPR 150.00 per year per kW installed capacity and 2% on energy sales up to 15years of operation. After 15 years of operation these values are NPR 1200.00 and 10%respectively.

TaxesThe prevailing taxes are 20% on the net income earned. The taxes imposed on hydropowerprojects from the start of the operation has limited the attractiveness of such power plants from

the financing point of view. In most of the cases, since royalty takes and tax-takes of thegovernment are high, with the existing energy tariff, the net takes of the developers are verylow to make the project financially viable.

4.4 Geological and Geotechnical Studies

The project area consists of sedimentary rocks of the Siwalik locally named as SoktimFormation. It comprises loosely cemented, medium bedded to massive, medium to coarsegrained, irregular blocky, strong, micaceous, grey 'salt and pepper' sandstone withintercalation of mudstone, siltstone and calcrete beds. The siltstones are blue, fine grained,medium bedded, medium strong to strong, irregular blocky. The mudstones are light brown,


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fine grained, medium bedded, medium strong, irregular blocky with botroidal weatheringpattern. In general all rock types are slightly to moderately weathered. Sandstone covers about40% whereas mudstone and siltstone cover 30% and 30% in the project area.

The MBT is present at about 400 m upstream from the weir axis. The MBT is characterized byabout 25-30 m wide zone of alternate of sheared/jointed rock and fault gauge/breccias.However, shearing effects were not observed in and around the proposed weir axis area.Hence, the effect of MBT is likely to be less in the weir site. In addition two major shear zonesare present in the area; one downstream of the headworks and the other near powerhousearea. They are characterised by crushed rock and fault breccias with seepage. The shear zonein powerhouse site is more active than that of the headworks. Apart from major shear zone sixminor shear/weak zones of 10 to 25 m thick were identified along tunnel alignment.

The weir axis and sluice structure areas are proposed on alluvial deposit consisting of roundedto well rounded boulders, cobbles, pebbles and gravels (60%) in sand matrix (40%). The slopeof the area is stable but clay lining is proposed to stop water leaking through the weir.

Rock outcrop was not observed in and around the proposed Inlet tunnel portal. Thegeophysical survey shows that the thickness of alluvial is less than 10 m. Therefore openexcavation is necessary to construct the tunnel portal.

In general, tunnel alignment is almost perpendicular to the bedding plane with moderatelydipping (60-35) which is favourable excavation condition. The proposed headrace tunnelalignment will pass through the sandstone (34%), siltstone (26%), mudstone (36%) and shearzones (4%)The rock mass along the tunnel alignment is rated and classified both by Q system and RMR.The observations were taken along and around the proposed tunnel alignment in the areathough difficult topographical features, soil cover, and dense vegetation as well as very poorrock outcrop. The rated parameters of Q value and RMR in the field is given in Volume 4Appendix C1. According to the surface observation the quality of rock mass distribution at thelevel of the proposed tunnel alignment was estimated (Table below). This estimated quality ofrock mass distribution is mainly based on rock mass rating at different rock exposures. The

rock mass is divided according to rock support class (next Table below).

Rock mass distribution along the headrace tunnel

Rock class Q- value Percentages

I Fair to very good rock > 2 51%

II Very poor to poor rock 0.6 2 29%

III Very poor rock 0.2 0.6 14 %

IV Very poor to Extremely poor rock 0.04 0.2 1 %

V Extremely poor rock 0.04 0.01 1 %

VI Exceptionally poor rock < 0.01 4 %

Hence in the tunnel about 51% is expected to fair to very good rock and about 49% isexpected to very poor to exceptionally poor rock. The rock support design is carried out by

empirical design criteria based on rock mass classification system entirely depending onprevious case studies in similar ground conditions. The rock support design is mainly based onthe NGI Q-system rock support chart and experience taken from similar diameter tunnels ofdifferent hydroelectric projects of Nepal.

According to the rock mass properties and size of a tunnel the rock support is divided into sixclasses to optimise rock support. A combination of grouted rock bolts in different spacing andfibre reinforced shotcrete in varying thickness are recommended from class I to VI. Reinforcedribs of shotcrete with pattern of bolting and concrete lining are also included in VI specially insqueezing section. Shotcrete is recommended throughout tunnel due to slaking nature of rock.


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A 2.3 m long, 25 mm diameter grouted rock bolt of tor steel is recommended. Invert concretelining is included in class I to VI throughout headrace tunnel due to slaking nature of rock.

Isolated wedge failures will not be significant and this designed rock support will control thefailure. Wedge failure will be more prominent in Class II & III. This support design also coversfor rock squeezing. Squeezing sections need heavy rock support. Therefore concrete lining orreinforced ribs of shotcrete are recommended in rock squeezing section. However, for rocksqueezing excavation method and support should have to be modified according to the rockbehaviour and existing ground condition during course of construction. This proposed rocksupport classes require modification during tunnel excavation according to local groundcondition.Recommended rock support for the headrace tunnel, (Width = 4.25 m, ESR = 1.6)ROCK CLASS Q-VALUE

RMRSUPPORT TYPE ANDAMOUNT

ROCK DESCRIPTION/RECOMMENDATION

IFAIR TO GOODROCK

Q>2RMR>50

Bolts in pattern 2 x 2 m at crown5 cm plain shotcrete at crownand wall.Invert = Concrete lining.

Massive to blocky, veryinterlocked, moderately strong,stable rock.

IIVERY POOR TO

POOR ROCK

Q=0.6 2RMR=40 - 50

Bolts in pattern 1.6 x 1.8 m5 cm fibre reinforced shotcrete

at crown and wall.Invert = Concrete lining.

Very blocky, interlocked,moderately strong rock with thin

clay layers and locally fractured.Local rock falls.

IIIVERY POORROCK

Q=0.2 0.6RMR=30 40

Bolts in pattern 1.4 x 1.6 mFibre reinforced shotcrete:

Crown = 8 cmWalls = 5 cm

Invert = Concrete lining.

Jointed and fractured rock withfew clay gouge bands.Loosening of the rock mass.

IVVERY POOR TOEXTREMELYPOOR ROCK

Q=0.04 0.2RMR=15 30



Invert = Concrete lining.

Heavily jointed/fractured rockwith few thicker clay gougebands.Progressive relaxation of rockmass.

VEXTREMELY

POOR ROCK

Q=0.04 0.01RMR< 15



Invert = Concrete slabs orconcrete lining.

Alternating of jointed/ fracturedrock (40%) and thicker clay

gouge bands (60%).Local roof falls and squeezingproblem.

VIEXCEPTIONALYPOOR ROCK

Q60%clay gouge andsheared/fractured rock. No self-supporting capacity and zerostand up time. Squeezingproblem i.e. time dependentdeformation.

For the purpose of cost calculation of the headrace tunnel, the above basis and therecommendation of the experts view of NEA has been integrated. 100% length of the tunnelinvert has been recommended for concrete lining (150mm to 300mm thickness), The wall andcrown has been lined with rock-bolting of size 25mm dia. 2.4 to 4m length tore steel in apattern of 1x1m to 2x2m spacing, plain shotcrete and fibre-shotcrete of 50mm to 200mmthickness. It is suggested that the fibre shotcrete lining with appropriate thicknessrecommended above is both strengthwise and timewise suitable for the rock-support. Inaddition to this 4% length of the tunnel (weak-zones) is suggested for concrete lining over theshotcreted surface of wall and crown with steel ribs.


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A surge shaft is proposed in about 20 m deep from the outlet portal in mudstone. Thethickness of residual soil ranges from 3 to 5 m and weathering depth of mudstone varies from5 to 7m. The shaft axis will be vertically down to the bedding plane, which is favourablecondition for tunnel excavation. Expected rock mass quality is fair to good condition. A 4 mlong grouted rock bolts in pattern and 10 cm thick fibre reinforced shotcrete is adequate fortemporary support in the surge shaft.

The penstock alignment is proposed along the moderately dipping ridges. The area is coveredmainly by residual soil. The expected thickness of residual soil ranges from 5 to 6 m andweathering depth of mudstone varies from 5 to 15 m. The anchor block of penstock pipe isproposed about 20 m upslope from the shear zone in the bent of pipe to avoid the shearzones.

The surface powerhouse site is proposed on the right bank of Muse Khola on the flat alluvialterrace. The deposit is non-cohesive, low to medium compact and pervious in nature. Itcontains about 30-40% sub rounded to rounded gravels, pebbles, cobbles and boulders ofsiltstone, mudstone and supported in 60-70% sand matrix. The fine material is non-cohesiveand contains sand. The shear zone is present near to powerhouse and follows towards slopeof powerhouse. There is no evidence of slope failure however activeness of the shear zoneduring construction phase might induce slope failure. Therefore powerhouse is proposedfurther downstream from the location of shear zone to minimise effect.

4.5 Seismicity

The seismicity study of other hydroelectric projects in Nepal is based on seismic-technonicfeatures of the project area and data on historical earthquakes of the region. The specificproject related seismic studies were not carried out so far. The records of seismic activities arelimited in the Nepal Himalayas and hence correlation of seismic events with adjacentHimalayan Region would be a useful source of information for designing the major componentsof project. Seismic coefficient for Mai Hydropower project is evaluated based on Nepalese andIndian Standards and compare and derived from Tamur-Mew project at this stage. Seismic

coefficient evaluated by Nepalese and Indian Standards is 0.10. Similarly recommended OBEof Tamur-Mewa project is 0.16 g 0.15 g.Hence, it is recommended that OBE value of 0.16 gand MDE value of 0.2 g be used for the Mai project (MHP is far from the epicentres of thehistoric past earthquake events in Nepal and the project is a simple low-height structure run-of-river scheme).

4.6 Mass Wasting Study

Only two landslides are observed in the upstream vicinity of Mai Khola. One is located nearMalbase village at about 200m downstream from the confluence of Thade Khola and MaiKhola, which is about 3 km upstream from the headworks site. The landslide is shallow, withplanar failure mechanism in green phyllite. The estimated average length, breadth and heightof the slide is about 60m 50m 100m respectively. The landslide is located above Mai Khola

and debris were not found to reach the Mai Khola. According to local people, this landslide ismore than 5 years old and is still active. The other landslide is situated at Ragapani village. It islocated at about 4 km upstream from the headworks site and 200m downstream from theconfluence of Thade Khola and Mai Khola. The estimated size of the landslide is 350 m x 125m x 260 m. The slide is active though feeding very little amount of debris to Mai Khola. It canbe concluded that chances of debris flow is very low from the field evidences and geologicalcondition.

5. PROJECT LAYOUT


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The project configuration has been selected after a study of alternatives. The alternatives forthe arrangement of the headworks were limited because of the site condition and topographicconstraints. The alternatives for both water conveyance and powerhouse locations werethoroughly analyzed with respect to geological, topographical and power benefit analysis. Theadopted layout is as follows:

HeadworksThe arrangement of headworks location was best selected some 200m downstream from theSoktim Tea Garden. The diversion weir height was selected in a way to allow the 100 yearflood without any damage to the Tea Garden in consideration with the flushing headrequirement. This is the best location allowing accommodation space for other headworksstructures. Similarly this location provides the shortest possible water conveyance length withthe maximum head gain on the other side of the watershed area (powerhouse area).

Tunnel and Penstock PipeThe headrace tunnel starts from the Gunmune village and ends at Muse Kholsa at elevation of300 metres above msl. It is 2172 m long. At the end of the headrace tunnel a surge shaft willbe made. After the surge shaft about 474 m long exposed penstock pipe will convey water tothe power house. It passes along the ridge of the area. Geology of this alignment is favourable

for the exposed penstock alignment.

PowerhouseThe powerhouse is located on the right bank of the Muse Kholsa just upstream of theconfluence of the Dhade and Muse Kholsa. The powerhouse will be a semi surface type. Thegenerator floor elevation in the Powerhouse will be 203 meters above msl and Tailrace waterlevel for normal operation will be 199.0 metres above msl. This location avoids the shear-zoneextending from Muse kholsa towards Dhade kholsa.

TailraceThe Muse Kholsa is not wide and deep enough to accomodate the design discharge of theproject if water is discharged into it. Therefore about a 1600 m tailrace system will be required

from powerhouse to the Lodiya Khola for safe release of designed discharge of the project.Some river training works will be required to protect the agriculture land along Lodiya Khola.The open canal from powerhouse to Lodiaya khola along the left bank is considered as theone alternative to discharge the designed flow. Buried concrete pipe is considered as thesecond alternative.The preliminary cost estimate of both options suggests that the choice ofstone masonry open canal option is more feasible. Hence the stone masonry trapezoidal opencanal option has been recommended for detail study.

Transmission LineThe route follows from the powerhouse to Danabari-3 upstream of Sukhani Khola and passesthrough Danabari-1, Khudanabari-7 and Khudanabari-8. Then it crosses near the boarder ofKhudanabari-8 and Arjundhara-5 and enters Arjundhara VDC via Danabari-1, Khudanabari-7,Khudanabari-8. It crosses the Birin Khola near the boarder of Arjundhara-5 and Arjundhara-6.

The line crosses the district road near the boarder of Arjundhara-6 and Arjundhara-3 and joinsat Charpani-3, Jhapa to the proposed route as described above. The total length of this routeis 24 km.

Access RoadThe existing motor-able roads from Lodiya Khola to the powerhouse area and from Soktim teagarden to Gunmune, with upgrading shall be used for the Project.

6. OPTIMIZATION


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The optimized dimensions of the major project components are as follows:Tunnel cross section area(m2): 13 m2Penstock diameter (mm): 2350 mmInstalled Capacity(MW): 14.5 MWDesign Discharge(m3/s): 15.4 m3/sNumber of generating units: 2 (Francis)

The average energy benefit rates for the optimization of the waterway was adopted USD 0.06/kWh. The installed capacity was optimized on the basis of levelized specific energy cost.

The head-water level was determined on the basis of flushing requirements during normalfloods. The weir crest height was not optimized due to its very little cushion on head to passthe 100 year flood without causing damage to Soktim Tea Garden. The normal water level attailrace was determined to avoid submergence due to proposed future Kankai MaiMultipurpose Project and fixed at 199.0m above msl. The gross head thus obtained is 117 m.

7. PHYSICAL DESCRIPTION OF THE PROJECT

The general arrangement of MHP is shown in figure 3 The arrangement comprises of

Headworks on the Mai river, located just downstream of the Soktim Tea State. The headworksdiverts water through a 2172 m long headrace tunnel and a 474 m long exposed penstock pipeto the semi-surface powerhouse and generates 14.5 MW through two vertical axis turbines.Then water will be discharged to Lodhiya khola through a 1370 m long stone masonry tailracecanal and a 225 m long tailrace pipe.

HeadworksThe headworks of MHP comprises of a 7.0 m high and a 133.0 m long free overflow weir,which diverts water into a 70.30 m long three chambered settling basin through orifice intakeand gravel trap. Sediment deposited in the settling basin will be flushed back to the riverthrough a 2.0 m wide, 2.0 m high and 225 m long flushing culvert. Then water from settlingbasin will be conveyed to tunnel intake by a 775 m long trapezoidal headrace canal. Furtherrefinement of geometry and design of the headworks components shall be finalised duringdetail design stage after conducting the physical hydraulic model test.

WeirThe location of the weir is selected at the rock outcrop about 20 m upstream from the openlarge barren flat field area. The overflow weir is 133 m long and 7.0 m high from the foundationlevel. The weir is Ogee shaped and crest level is 316.0 m above msl.

The calculated water elevation for 100 and 1000 years flood are 321.150 m and 322.75 mabove msl respectively. Adopted top level of flood and head wall is 322.75 m above msl withfree board of 1.6 m for 100 yrs flood.

Stilling BasinThe stilling basin consists of three stilling ponds and two baffle walls. The length of the firststilling basin is 17.8 m and the invert level is 311.50 m above msl. The first baffle wall is 2.0 m

high and the top level of the wall is 313.50 m above msl. The second and third stilling pondsare 14 and 12.65 metres long respectively. And their floor levels are 309.75 m and 309.00 mabove msl respectively. The calculated water level at the end of the stilling basin is 314.73 mand 316.0 m above msl for 100 years and 1000 years flood respectively.

UndersluiceAbout 100 m long and 17.5 m width at weir axis (width gently increases in the upstream)approach canal is designed to maintain a clear and well defined river channel towards theintake and to flush the bedload build up in front of the intake. The invert surface are lined withhardstone and the wall up to 1.0 m high are lined with 16 mm thick steel lining to protect theirsurface from erosion and abrasion from the bed load. A 100 m long and 5.5 m high divide wall


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separates the weir area and the undersluice. Two radial gates of 8 m wide and 5.5 m high areproposed to flush the bedload sediments which will be accumulated in front of the Intake. Afish ladder is placed along the side of the left wall of the undersluice. The fish ladder passesfrom the intake area to the stilling basin area along the undersluices left wall.

IntakeThe side orifice intake is located about 5 m upstream of the weir crest axis on the left bank ofthe river. A low concrete sill, with a structure to prevent passage of large boulders, will allowwater to enter the intake area. The intake consists of 4 orifices of 3.0 m wide by 2.0 m high todraw the water from river in the intake headwall. It is aligned parallel to river flow. The invertlevel of opening is set at an elevation of 313.5 m above msl. Bedload up to 100 mm diameterand suspended sediment will pass through intake orifice and will be conveyed to gravelflushing arrangement along the intake culvert. Intake gate will be fixed at inner side of theintake headwall to control the flow into the intake culvert during high flood. An intake platformwill be designed for the gate operation. The level is fixed at 322.75 m above msl for 1000 yearsflood without free board and 1.6 m free board for 100 years flood. The water level inside theintake will be 317.50 m above msl for 20 years flood. The wall level inside the intake isadopted at 317.75 m with a free board of 25 cm. When flood is higher than that, the intakestoplog gates will be closed.

A coarse trash-rack of 100mm opening shall be provided at the intake. Details of trash-rackand cleaning arrangements shall be decided during detail design and model testing.

Gravel TrapA gravel trap is located about 15 m downstream of the Intake and designed with a singlehopper bottom for conventional hydraulic flushing. The size of the gravel trap is designed tosettle the particle size of 5 mm. The gravel trap is 10 m long, 14 m wide and 6 m high. Thelongitudinal slope is 1 in 60. The most vulnerable areas in gravel trap as well as in flushingchannel exposed to wear and tear due to high velocity should be lined with dressed hard stoneand steel lining. At the end of parallel section and just before the outlet, a coarse trash rack of14 m wide and 4 m high with vertical angle of 10.6 degree is located to prevent passing ofdebris. The stacked debris should be removed mechanically.

The water level at the gravel trap for the designed discharge will be 315.87 m above msl andthe adopted wall level is 317.75 m above mean sea level. A 25 m long spillway with crest level316.00 m above msl is provided at the right wall of the gravel trap to spill excess water whichwill be entered to intake during high floods. The spilled water will be discharged back to rivervia stilling basin.Sediment deposited in the gravel trap will be flushed through a flushing culvert. The flushingculvert is 43 m long, 1.5 m wide and 2.5 m high with longitudinal slope 1 in 60. The bottom slablined with hardstone and the wall up to 1.0 m high are lined with 15 mm thick steel lining toprotect their surface from erosion and abrasion. A 1.5 m wide and 2.5 m high flushing gate willbe operated to allow for necessary flushing discharge only so that production can go onwithout interruption.

Settling BasinThe settling basin is located 25.0 m downstream of the gravel trap with 25 m transition length.The settling basin is designed to trap 90% of 0.2 mm particle size. The maximum flow velocityin settling zone will be 0.2 m/s. The discharge to the settling basin during flushing is controlledby three gates of size 4.25 m wide by 2.25 m high which are located just upstream of the inlettransition to the settling basin. The settling basin consists of three chambers with 8 m widthand 70.3 m long each. The average depth of the settling basin is 5.25 m. The water level atthe settling basin for the designed discharge will be 315.80 m above msl and the adopted topwall level is 316.3 m above mean sea level with freeboard 50 cm. The middle wall levels areadopted only at 315.90 metres above msl. The bottom slab of the settling basin will have aslope of 1 in 100. The less sediment content water from the settling basin will be discharged


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through 8.0 m width weir to the headrace canal. There are three stoplog gates 20 mdownstream from the weir to stop the entry of water to the settling basin from the canal duringthe flushing period. The size of the stoplog gate is 2.77 m wide and 2.6 m high. The sedimentflushing system will be conventional hydraulic flushing.

The sediment flushing is controlled by 2 m by 2.5 m gates for each chambers. Stoplogs areprovided for each gate for the gate maintenance purpose. The gates are located adjacent tothe right wall of the settling basin outlet. About 225 m long 2.0 m by 2.0 m rectangular sectionflushing culvert is proposed for sediment flushing purpose. The culvert bed slope will be 1 in500. The bed slope is adopted flatter so that the flushing culvert should not be submergedduring high floods(1 in 5 years flood).

Headrace Canal and Balancing PondLess sediment content water from settling basin will be conveyed by a 775 m long trapezoidalheadrace canal to balancing pond. The longitudinal slope of the canal is 1 in 1500 with sideslopes 1 in 1. The canal is constructed with 0.5 m thick stone masonry with 1 in 4 cementsand mortar and 10 cm thick concrete lining with nominal reinforcement for thermal crackcontrol. The pond is located at Gunmune Bagar. The main purpose of the pond is to balancethe water supply to start the powerplant for short period. The average length and width of thebalancing pond is about 100 m and 100 m respectively. The embankmet of balancing pond isof the earthfill type. The water level at the pond area will be 315.3 m above msl and the toplevel of the embankment is adopted at 316.0 m above msl.

Tunnel InletThe tunnel intake is located at the end of headrace canal and the balancing pond. The entry tothe tunnel intake from the headrace canal consists of a 10 m long transition part fromtrapezoidal section to the rectangular section, a fine trash rack before the sloping glacis, 7.5 mlong and 4.4 m high sloping glacis and funnel type tunnel intake. Sloping starts from elevation313.15 m above msl to 310.0 m above msl. The funnel starts at an elevation of 310.0 m with adiameter of 10.2 m and ends at 3.3 m length with a diameter of 4.25 m. Vertical drop of the4.25 m shaft is 1.9 m and the shaft is connected with headrace tunnel by a bend of the samediameter with central radius of 3.0 m. Invert level at the beginning point of the headrace tunnel

is 300.00 m above msl. The transition length between the circular shape to the invert D shapeis 8 m.

Headrace tunnelThe headrace tunnel starts at the Gunmune village and ends at the Dhade Kholsa Gaon justupstream of the confluence between Musse Kholsa and Dhade Khosa at an elevation of297.00 m above msl. The headrace tunnel is 2172 m long. At the end of the headrace tunneland before the surge tank a rocktrap of 80 m long 3 m wide and 1.5 deep has been provided.

The cross section of the tunnel is inverted D shaped with base width and height being 3.80 meach and crown radius 1.9 m. According to the geological conditions 4 types of tunnel supportshave been considered. About 70% of the tunnel length where the rock is fair to good qualitywill be supported with 50 mm thick plain shotcrete and 25 mm dia 2.3 m long rock bolts at 2

metre centre to centre provided in staggered. About 23% of the tunnel area consists of poor tovery poor rock. Tunnel support in this area will be 50 mm thick fibre reinforced shotcrete and25 mm dia 2.3 m long rock bolts at 1.6 m centre to centre provided in staggered. About 3%tunnel length will be in very poor rock, support in this area will be 50 mm thick on wall and 80mm thick on crown fibre reinforced shotcrete and 25 mm dia 2.3 m long rock bolts at 1.4 metrecentre to centre provided in staggered. Remaining part of the tunnel will be in extremely poorrock, support in this area will be 70 mm thick on wall and 100 mm thick on crown fibrereinforced shotcrete and 25 mm dia 2.3 m long rock bolts at 1.2 m centre to centre provided instaggered. The base of the tunnel will be concreted with 10 cm for first and second type tunnel,15 cm thick for third and forth type tunnel.


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Surge-TankThe surge shaft proposed at the end of the tunnel and immediately downstream of the rocktrap is located at about 400 m upslope from the powerhouse area. The shaft consists of 6.0 mfinished diameter with concrete lining of 0.6, 0.4 and 0.25 m thickness at lower, middle andupper part of the shaft respectively. Each part of the shaft is 9.0 m high. The surge shaft isconnected to the tunnel by a 4.0 m diameter and 0.8 m thick orifice. The shaft is covered with a8 m diameter corrugated roof truss.

Penstock PipeThe penstock pipe comprises three sections: a 84 m long horizontal steel lined tunnel, a 265.5m long inclined exposed steel pipe and 66.5 m long buried steel pipe before it bifurcates. Theinternal diameter of the pipe is 2.35 m and the thickness varies from 10 mm to 32 mm. Afterthe inclination part the penstock crosses the Muse Kholsa. The penstock pipe at the Kholsacrossing will be protected by a 30 cm thick concrete casing. Before entering the powerhousethe penstock pipe is bifurcated symmetrically to the penstock alignment at 36.870 and 15.8 mlong. After bifurcation a 10 m long penstock pipe conveys water to the powerhouse. Thethickness and the diameter of the pipe after bifurcation is 25 mm and 1.5 m respectively.

Support Piers, Anchors and Thrust BlocksThere are five anchor blocks for four vertical bends and one combined bend. The anchorblock is to be constructed of C15 concrete with 40 % plums and nominal reinforcement. Hoofreinforcement is required around the pipe. The size of the anchor block is about 4.5 m long,3.8 m wide and 4.0 m high.

There are four thrust blocks. The first thrust block is for the horizontal bend immediately afterthe Muse Kholsa crossing, the second is for the bifurcation and the third and fourth thrustblocks are for the smaller pipes after the bifurcation. Thrust blocks are also constructed of C15concrete with 40 % plums and normal reinforcement.

Support piers are required along the straight section of exposed penstock between anchorblocks. Spacing of the piers is kept 3 m center to center to avoid overstressing of the pipe. The

support piers will be constructed with C25 reinforced concrete.

PowerhouseThe powerhouse is located at the right bank of the Muse Kholsa just upstream of theconfluence of Muse Kholsa and Lodiya Khola. The powerhouse is a surface structure toaccommodate two generating units of capacity 7.25 MW each. The powerhouse consists of aR.C.C structure that houses the machine floor and control building. Machine floors are inletvalve floor, turbine floor, generator floor, maintenance and unloading bay. An overheadtraveling crane is installed in the powerhouse to facilitate installation and maintenance ofpowerhouse equipment. The superstructure of powerhouse will be constructed from R.C.Ccolumns, walls and block masonry walls. Series of windows will be provided for proper lightingand ventilation in the powerhouse. One small access door and one large shutter door will bearranged in the powerhouse. The small access will be mainly used for the entrance of people

and small size materials and equipment and will be located at the stair case area. The largeshutter access will be mainly used for the transportation of large equipment and heavyequipment during installation and repair and maintenance of the power plant. This shutteraccess will be located at the erection bay of the powerhouse. The roof of the powerhouse isarranged with steel truss structures on R.C.C columns covered with corrugated colouredgalvanized iron sheets.

TailraceAfter the generation water will be discharged to the tailrace canal via draft tube. Stoplogs areprovided at the end of the draft tube. Water level immediately after the draft tube will be 199.0m above msl during normal operation period. The tailrace is designed for the maximum 202.75


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m above msl considering the maximum flood level of Kankai Mai Multipurpose Project. Thetailrace conduit is connected with the draft tube by a 13.5m long transition section. The first 8m portion has horizontal bottom slab, while the other 5.5 m part has sloped bottom slab toconnect the tailrace conduit. A stoplog is provided at the beginning of the tailrace conduit. Astoplog is also provided at the end of the tailrace at Musse Kholsa. This stoplog will beoperated during tailrace conduit maintenance period.The tailrace conduit consists of a 15 mlong C25 concrete culvert, 20 m long C25 transition, 1370 m long trapezoidal section stonemasonry canal, 225 m long 8 mm thick and 1.5 m dia steel pipe and 15 m long outlet structure.

The tailrace canal begins with invert level 195.60 m above msl to maintain minimum tailracewater level of 197.00 m. The tailrace canal is trapezoidal in section of stone masonry with 1 in4 cement sand mortar. Bottom width and height of the canal are 1.5 and 1.5 respectively. Thelongitudinal and the side slope of the canal are 1 in 100 and 1 in 1 respectively.

Generating EquipmentTwo generating units are placed with Francis turbine. The installed capacity is 14.5MW (2x7.25 MW). The selected turbine is two sets of vertical Francis turbine with 7.75 MW capacityeach, at the net head of 108.89 m and design discharge of 15.40 m3/s (7.7 m3/s per unit). Thespeed is 600 rpm. Vertical synchronous generator, N=7250 kW, 50 Hz, 10.5 kV, 0.85 p. f. lag,

class F insulation with temperature rise limited to class B have been used.

Two sets of main transformers with 8530 kVA-33/6.3 kV shall be used. The adopted standardsshall be: GB1094.3.5-85, GB/T6451-1995, GB1094.1.2-1996, JB/T3837-1996 equivalent toIEC standards.

One overhead traveling crane shall be of electrical operated, cabin controlled type, suitable forthree-phase 220/380 V-50 Hz power supply, and shall be equipped with a single trolley havingboth main and auxiliary hoists. The maximum load to be lifted by the crane shall be 35 ton.

Transmission Line24 km long 33 kV double circuit transmission line from powerhouse switchyard to connect tothe NEA sub-station at Anarmani of Jhapa district is proposed.

8. ENVIRONMENTAL IMPACTS AND MITIGATION

The environmental impact to the size and type of the project are moderate. The major impactshall be the ecosystem of the river downstream of the weir up to 8 km length where Deo Maidischarges approximately 1.2 m3/s of water in the driest month (March). The continuousenvironmental release of 10% of minimum monthly flow which is equivalent to 722 l/s willcompensate the adverse effect to this reach. A fish-ladder has also been proposed formigratory fish-movement.

The key social issues in the area are rural electrification and upgrading of the access road tothis area. Electricity is a must for the prospective growth of small scale industries and

upgrading of the road will facilitate trade and commerce of the area. With the launching of theproject some budgetary provisions are made to cooperate with the local people for these workswhich will provide better environment for the local area.

There is existing irrigation system in Kankai river which is approximately 16 km downstreamfrom the powerhouse. Adoption of 14.5 MW simple run-of-river scheme will have no effect tothe existing Kankai irrigation system.

There shall be permanent loss of forest land and trees as in the case of other similar type ofprojects. However, the loss is minimal in the main project area and higher in the transmissionline route. The re-plantation program shall address this issue to the extent of acceptibality.


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Two species of animals are found in the area Salak (Manis crassicaudeta) and Sun Gohoro(Varanus flavescens) which are protected by the government under the National Park andWildlife Conservation Act 1973. During the project construction, contractual provisions shall bemade for restricting hunting and entering into the forest by the project people.

Three river systems namely Mai Khola, Muse Kholsa and Lodhiya Khola pass through theproject area. Mai river system provides habitat for fishes such as Sahar (Tor tor) and Asala(Schizothorax plagiostomus). Other fishes locally called as Gardi, Thend, Buduna, Raj bam,Katle, Jhinge etc. are also available in the Mai river.

Environmental Management Plan for impacts after designing and implementing them shall bemonitored to check effectiveness of design and implementation plan (mitigation requirements).For this compliance monitoring and impact monitoring shall be done. To facilitateEnvironmental Management Plan (EMP), an Environmental Management Unit (EMU) workingunder Project Manager will be established.

9. CONSTRUCTION SCHEDULE AND COST

9.1 Access Road

The access to the site is through the existing road from East-West Highway at Birtamod ofJhapa district to Soktim via Sanischare, Khudunabari and Garuwa Sukrabare. The road needsto be upgraded for the purpose of supply to the project. The upgrading of the road shall bestarted at least 3 months before the main contractor mobilizes to the site. The duration tocorrect geometry of the road including descending reach to the headworks site from Soktimhas been estimated about month. Thus the access to the site shall be completed in fourmonths including one month at the start to the main civil contractor.

All local supplies shall be carried out through the East-West Highway at Birtamod and locallytransported through the access road up to the site. Location of local construction materials

such as gravel, sand and red-clay is nearby the access road and the project area and hence iseasily accessible.

9.2 Camps and Facilities

The peak time labour (from outside the Project area) is estimated to be around 300 persons.There is a village Gunmune at the headworks site and Musetar village at the powerhouse site.In addition there is a small Bazar at Sitali which is at a distance of 2 km from the powerhouseand another village Soktim which is at a distance of 1 km from the headworks site. One third ofthe peak labour can be accommodated in the nearby villages. However, it has been planned toconstruct temporary camps for the labour at the adjacent areas. Headworks camp shall beplaced aside of the Gunmune village and powerhouse camp shall be constructed downstreamof the powerhouse in the plain area of Muse Kholsa. Tunnel muck for the tunnel length to be

excavated from intake portal side shall be disposed into the left bank of Mai river in theheadworks (settling basin, canal) area whereas the tunnel muck from tunnel and surge shaftarea including excavated material from penstock foundation shall be dumped along the MuseKholsa bagar in a controlled manner.

Drinking water to the camp shall be provided from the source at Soktim by constructing areservoir to collect water during night. The water supply shall be done via pipe line ofapproximately 1.5 km upto the headworks. Other alternative for water supply shall be using thewater of Mai Khola with purification.


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9.3 Construction Power

The existing 11kV line at the Soktim village is approximately 1.6 km from the headworks siteand then another 3.0km from headworks to powerhouse site. Another option is to build a new33 kV transmission line from Puwa Power Plant located at a distance of 8 km from theheadworks site. Construction power requirement for tunnelling is at least 500 kW at the timewhen single tunnel-boomer is working. To work from two faces with this power, the sequenceof drilling and support work should be altered. With this arrangement, 750 KW power shall besufficient to work in tunnel and concreting.The tentative time for the erection of this line isassumed to be 4 months.

9.4 Contract Package

It is aimed that the main civil contractor shall perform the execution of all civil works includingtunnel and powerhouse. The preparatory works such as upgrading of access road, ownerscamp facilities and construction power supply shall be executed by the owner with sub-contractors before and during the full mobilization of the main civil construction contractor. Thiswill provide additional time cushion to the project for accelerating construction works.

The 33 kV power evacuation transmission line shall be a separate contract and be started insuch a way that the erection of the line is ready before testing/commissioning date of theproject. This work does not fall under critical path.

All hydro-mechanical works such as gates, trash-racks, steel penstock pipe and other steelworks will be another contract package. This package is fitted in the construction schedule sothat the works are easily carried out parallel to all civil construction activities.

Powerhouse equipment from the end of penstock until the start of 132 kV power evacuationline will be a single package including design, drawings, fabrication & supply,erection/installation plus testing and commissioning.

Engineering design and construction supervision of the project will be conducted by in-house

engineering department of the Owner. This will facilitate close monitoring and coordination withdifferent contractors and suppliers for integrated work harmony to achieve set target date forcompletion of the project.

9.5 Project implementation Schedule

The project implementation schedule has been derived on the basis of calculated quantities ofworks to be done and the duration that is required for design, fabrication, supply andinstallation of major project components. Time for further investigations recommended in thisreport to incorporate in detail design and preparation time for contract and tendering includingnegotiations and contract awards have been considered appropriately while preparingimplementation schedule. The critical path observed is tunneling which is estimated to be 34months (including portals and surge shaft) and the total duration of the project completion

including testing and commissioning is estimated to be 4 years from the date of powerPurchase Arrangement. The Implementation Schedule is attached with this summary.

9.6 Cost Estimate

The total Project cost is NPR 2125 million (26.52 MUSD). All costs are as of March 2006.Currency conversion used was 1 USD = 72 Nepali Rupees, local market rates for similarnature civil construction and hydro-mechanical works have been used, royalties and taxeswere applied as per provisions in the corresponding HMGNs regulations. Royalties or costsassociated with construction materials and borrow area have not been considered and it was


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assumed that the local contractors shall bid for civil and hydro-mechanical installations.Powerhouse equipment supply shall be through international suppliers by inviting proposalsand negotiating with them.

The capital cost of the project were derived from the unit costs of the major civil work items.The eletro-mechanical equipment cost were adopted by comparing the quotations receivedfrom the suppliers. The hydro-mechanical installations were compared to the prices in existingmarket as well as quotations received. The environmental mitigation costs and land costs werederived by direct interaction with the local people and the environmental provisions for suchmitigations. The physical contingencies adopted for the capital cost estimate of the project are:(a) Tunneling work (15%), Civil construction (10%), Electromechanical equipment (5%), Others (10%). An allowance of 10% of the project cost was applied for engineeringmanagement and administrative costs of the project to cover further site investigations(geological investigations and physical modeling, environmental assessment, preparation oftender stage design and documentations and detailed engineering design of the project,contract and tendering, construction supervision, testing and commissioning of the project,project administration, reviewing and approving contractors submittals, and cost ofowners/consultants equipment, supplies, communication and transport. The summary of thecost estimates are presented in Table below:

Project Cost Summary

SN ITEM DESCRIPTION AMOUNT SUB-TOTAL

NPR NPR

A Owner's camp and facilities 25,000,000 46,200,000

B Access road upgrading 4,000,000

C Construction power line 7,200,000

D Main Civil contractor's Mobilization 2,500,000

E Contractor's camp and facilities 7,500,000

sub-total 46,200,000

1 Civil construction 854,449,543

1.1 Headworks 370,942,218

1.2 Headrace Tunnel 275,870,5251.3 Penstock Pipe 24,855,000

1.4 Powerhouse 66,837,000

1.5 Tailrace 25,728,000

Contingencies(15% on 1.2 and 10% on other) 90,216,801

2 Land & Environment 40,000,000

2.1 Land acquisition 15,000,000

2.2 Environmental impact mitigation costs 25,000,000

3 Transmission Line 113,067,966

3.1 33 kV power evacuation transmission line 80,582,900

3.2 Substation equipment at delivery point 12,206,160

3.3 Land and environment 11,000,000

Contingencies(10%) 9,278,9064 Hydromechanical installations 129,265,177

4.1 Headworks 25,833,153

4.2 Penstock pipe and hm arrangments 84,335,500

4.3 Tunnel 7,345,144

Contingencies(10%) 11,751,380

5 Powerhouse Equipment 354,375,000

5.1 Complete PH equipment sets 337,500,000

Contingencies(5%) 16,875,000

Total Project Cost (rounded up to the nearest 1000) 1,537,357,686 197,743,769

F Power consumption during construction 44,008,000


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SN ITEM DESCRIPTION AMOUNT SUB-TOTAL

NPR NPR

G Engineering Management & administration (10%) 153,735,769

H VAT and Taxes/duties 196,385,028

13% on item 1,3,4 & 5 (except land and env under 3.3) 187,220,499

2.5% Local Taxes & duties (item 5, & 3.2) 9,164,529Sub-total 1,931,486,483

I Bank Interest During Construction 193,814,000

Total Project Construction Cost (NPR,100000) 2,125,400,0002,125,300,483

round(0.01) 29.52 Million USD

9.7 Disbursement Schedule

The summary of the cash-flow is as shown in the Table below. The cash-flow is based on theimplementation schedule and the corresponding costs of the project components.The yearlydistribution of costs is as follows:

Yearly cash-flow (transmission line cost included)Year-1 Year-2 Year-3 Year-4

15.88% 27.63% 46.77% 9.71%

10. PROJECT OUTPUTS AND BENEFITS

Energy Production and average Energy Rates

The energy production is carried out on the basis of daily data of Rajduwali station withcatchment coorelation. These data were then transferred into Nepali calander months. Below isthe Monthly average Power and energy summary Table:

Summary of Average Power and EnergyNepali

Calander,Months

No. ofdays

AveragePower,

MW

AverageMonthlyEnergy,MWh

Energy Loss, MWhAverage MonthlyContract Energy,

MWhTransmission

lossTransformor

loss

Baisakh 31 9.32 6,937 220.34 104.06 6,613

Jestha 31 12.10 9,003 371.24 135.04 8,496

Asadh 31 14.44 11,091 526.43 166.36 10,398

Shrawan 32 14.53 10,807 516.02 162.10 10,129

Bhadra 31 14.53 10,807 516.02 162.10 10,129

Ashwin 30 14.53 10,807 516.02 162.10 10,129

Kartik 30 14.06 10,123 467.72 151.84 9,503

Mangsir 30 11.47 7,981 300.82 119.71 7,560

Poush 29 9.03 6,287 186.56 94.30 6,006

Magh 29 7.37 5,306 128.51 79.59 5,098

Falgun 30 6.55 4,562 101.83 68.43 4,392

Chaitra 31 6.48 4,824 108.17 72.36 4,643

Total 365 98,533 3,960 1,477.99 93,095

Operational Outages (5% considered) MWh 4,655Total annual Contract Energy (MWh) MWh 88,440

The average energy rate considered for the computation of the benefits is NPR 4.48/kWh in theyear 2006 (Base Year). These rates were then escalated for 15 years from base year at the rateof 6% for first 5 years and 2.5% for the rest of the period.


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The energy benefit shall be by the sales of energy to the grid and the government-takes shallbe the royalty on installed capacity and energy production as well as the taxes on energysales.

Energy ConsumptionThe estimated energy produced by MHP is assumed to be consumed by the local market inthe National Grid. This project situated at the eastern region will be the added benefit to thenational grid because all other existing plants are far from this load centre and the nearest isthe multi-fuel diesel plant in Duhabi. At present demand supply scenario, more power plantsneed to be added in this region for better supply of the energy. Hence the energy produced bythe project is considered to be consumed fully by the grid.

Emission BenefitThe benefit stream for the project is based on the sale of power and quantification of thebenefit from reducing emissions from an equivalent thermal generation alternative. The projectlocated in the eastern region shall directly reduce the operation of existing multi-fuel dieselplant located in this region to the extent of its capacity at least during dry season (midNovember to mid May) as well as the import of power from Indian system during this period(sometimes even during wet period).

Benefit Evaluation for MHP has thus been calculated at least for dry season generation of 32.2GWh energy (mid November to mid May) as shown in table below:

Description External Cost(USc/kWh)

Reduced kWh Emission Credit(USD)

CO2: Multi Fuel Diesel 0.6 32.20*106 193,200

SO2: Multi Fuel Diesel 0.14 32.20*106 45,080

NOx: Multi Fuel Diesel 0.0075 32.20*106 2,415

Total Emission Credit in USD 240,695

The emission credit has been estimated for the dry-season energy when operation of the multi fuel diesel plant is must.

Capacity Benefit

The long run marginal cost analysis from the report entitled "Size and Number of UnitsOptimization of Upper Arun Project" which was carried out for the World Bank in 1991suggests the capacity benefit of USD 108.4 /kW per annum. The capacity benefit has not beenapplied in the financial analysis since the project is intended to be developed through privatesector and the benefit shall be reflected through the agreed energy tariff between NEA and theprivate party.

11. PROJECT EVALUATION

The evaluation of the project has been performed from the financing point of view. The analysishas been preformed for the total project development cost of 2125 million Nepali Rupeesincluding transmission line. Operation and maintenance costs were considered as 2% of projectdevelopment cost. NPV were calculated at 10% discount rate for 25 (34) years. The interest on

bank loan on 70% debt has been considered as 11% during construction period (including bankcommissions and loan management fee) and then at the rate of 10% per annum during loanrepayment years.

The base case results of financial evaluation for average energy rate of 4.48 NPR/kWh at thediscount rate of 10% and escalation as mentioned above is presented in Table below.

Base-Case Results

Net Present Value of Cashflow at 10% discount rate, NPV 1,283 Cost Revenue

Internal Rate of Return (IRR) 17.52% 100% 100%

Benefit Cost-ratio (BC-ratio) 1.54


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Return on Equity (RoE) 24.58%

NPV Govt-takes (as royalty and tax takes) 761

The increase in the cost is likely due to international market with ever increasing price of fueland that climatic change may result in longer droughts resulting into losses of revenue of thehydropower projects. In addition a hydrological risk is always bound to be with hydropowerprojects. This risk always exists and therefore there must be some margins in the benefitstreams to safe-guard the investments. The normal practice shall be to test the project at 10%cost over-run and 10% revenue losses. The results of this test are as shown in the table below:

Results of Sensitivity Test (cost over-run by 10% and revenue loss by 10%)

Net Present Value of Cashflow at 10% discount rate, NPV 862 Cost Revenue



Return on Equity (RoE) 19.30%


Since the hydropower projects involves many risk factors, return on equity less than 20% will bevery risky for investors to invest into hydropower projects.

It is further tested on its sensitivity to evaluate the attractiveness of the project at the averageenergy rates of 4.25NPR/kWh and escalation as before (NPR 4.25/kWh in Year 2006 with 6%escalation for 5 years and then 2.5% for the next 10 years). The results are as shown in theTable below:

Net Present Value of Cashflow at 10% discount rate, NPV 729 Cost Revenue



Return on Equity (RoE) 17.95% (17.7% in 25Yrs)


Since the return on equity is as low as 17.7%, further test on lower rates has not been performed.

It is the negotiation process between NEA and SHPL where the energy rates shall be fixed onthe basis of sharing of risks between both parties.

CONCLUSIONSThe evaluation shows that the project is financially viable and attractive at the average energyrate of NPR 4.48/kWh in year 2006 and still shows the viability at an average rate of 4.25/kWh.These rates are then to be escalated at the rate of 6% for first five years and then at the rate of2.5% for another 10 years.

Further, it is recommended to enter into negotiation for the PPA with NEA on the basis of theresults of this Summary Report. The analysis performed herein above

00 executive summary 14.5mw jul07 nea

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