Middle Marsyangdi Hydroelectric Project is a daily pondage run-of-river scheme with an installed capacity of 70 MW and an average annual energy generation of 398 GWh. This Project is being funded by KfW (Germany), HMG/N and NEA. The estimated cost of the Project is about 13.65 billion rupees.

The project site is about 170 km west of Kathmandu, in Lamjung District. The dam site is located at a narrow gorge of Marsyangdi River near Phaliasangu in between Udipuir VDC and Chiti VDC. The surface powerhouse site is at the right bank of the Marsyangdi River at Siudibar, Bhoteodar VDC. The Project utilizes a gross head of 110 m and discharge of 80 m3/s for driving two Francis Turbines of 36 MW capacity each. The Project has a peaking capability for 5 hours even during the dry season. The major components of the project are: 62 m high, 95 m long combined concrete gravity and rock fill dam with concrete spillway capacity of 4,270 m3/s, three 12 m x 19.5 m spillway gates, a 1.6 million m3 capacity reservoir, three underground desanding caverns (15 m x 100 m x 25.1 m each) with two basins in each cavern to flush 95% of 0.2 mm particle size by vertical flushing (BIERI) system, a 5.4m diameter 5,210 m long concrete lined power tunnel, a 20 m diameter and 45 m high surge tank, a 450 m long penstock, and a 41 km long single circuit 132 kV transmission line.

Fichtner Joint Venture (FJV) is responsible for carrying out the detailed design and construction supervision of the Project. TAEC-NESS Joint Venture, the consultant who carried out the Environmental Impact Assessment (EIA) is monitoring the environmental mitigation plan during the construction.

The construction of the Project commenced from June 25, 2001. The civil contractor of the project, Dywidag-Dragados-CWE JV (DDC JV), is presently carrying out excavation works for dam, surge tank, desanding caverns & power tunnel, concreting works at powerhouse sub-base, u/s wing walls, tunnel lining works for diversion tunnel, etc.

During the year, progress in construction of the project was severely hampered. Most of the night shift works could not be carried out due to imposition of curfew at the project area. In addition, various incidents of security lapses have resulted in suspension of blasting in underground works since 21 September 2003. Further, due to security related incidents that led to death of two workers in ambush the contractor suspended the work temporarily from 6 October 2003 as per the Engineer's instruction. To resume the works a number of meetings were held at different dates with high level Royal Nepal Army officers, CDO, Secretary of Ministry of Water Resources, NEA management, DDCJV and FJV. Efforts were made to provide additional security forces in order to restart the works. The contractor unilaterally terminated the contract from 13 November 2003 stating that the payment of duly certified amount was not deposited in its bank account on time. Several meetings were held between KfW, Fichtner J/V, NEA and DDC JV to resume the works. Finally, a MoA (Memorandum of Agreement) was signed in Kathmandu on 20th January 2004 to complete the project with the commissioning of all three units by December 2006. Accordingly, project works resumed from February, 2004.

By the end of June 2004, in the headworks area, about 83% of the excavation works have been completed. Similarly, excavation of intake tunnels and valve chamber have completed, power tunnel excavation have finished up to about 36%, about 54% of desanding caverns excavation and about 90% of upstream wing walls have completed. About 3% of surge tank excavation has finished. In the powerhouse area, about 58% concreting works has been carried out after finishing the excavation works. Two major key dates, namely, readying for draft tube installation and penstock manifold were met.

As for the status of the other lots, Mechanical Equipment (Lot M) Contractor Voith Siemens Hydropower Generation GmbH & Co. has procured about 85% of the material and manufacturing is in progress. Installation of Draft tube No 1 has been completed and that of Draft Tube No 2 is about 80% complete. Testing and commissioning of 132 kV GIS switchgear equipment (Lot SS2) at the existing lower Marsyagndi power station has been completed by Alstom Energie-technik GmbH in January 2004. The contractor of Electrical Equipment (Lot E) ALSTOM Power Generation AG has started procurement of the generator-embedded parts in Switzerland, and they are planning air shipping it at site. The local agent (NHE) is continuously carrying out the supervision of the vertical uplinking of the Earthing straps at powerhouse. For the Transmission line (Lot TRL) project is awaiting concurrence from KfW to negotiate with the lowest bidder SAG. The 132 kV Substation/Switchyard (Lot-SS1) Contractor, ALSTOM Energie technik GmbH, has finished fabrication works of 3 out of 7 single phase generator transformers and 1 three phase 5 MVA transformer in Naini, India. Lot HSS (Hydraulic Steel Structure) Contractor VA-Tech Hydro has started to ship the steel plates to the site and will start fabrication of penstock. Also, NHE has started fabrication of other equipments at their workshop in Butwal.