Chinese firm Shenzhen Farad Electric Company lost a $16 million contract it held to build two substations at Matatirtha, Kathmandu and Markichok, Tanahu for being a no-show.

The high capacity substations are part of a $56 million Marsyangdi-Kathmandu transmission line project to bring electricity from the Marsyangdi basin to Kathmandu to meet its ever-rising energy demand. Shenzhen Farad received the contract in December 2017.

“The contractor deserted the project sites one month ago, and we sent a letter asking it to resume work. But it did not show up despite a pledge to do so leading to the termination of the contract,” said Tara Pradhan, project chief. “We are determining the amount to be seized from the contractor in performance guarantee.”

Shenzhen Farad is expected to forfeit its performance guarantee worth about Rs500 million.

According to the Nepal Electricity Authority, the objective of the project is to increase the power transfer capacity from the Marshyangdi corridor which has a high concentration of power schemes to the Kathmandu Valley to reinforce the power system and improve transmission reliability.