R-Infra in $900 mn Nepal highway project race

Reliance Infrastructure (R-Infra), a part of the Anil Dhirubhai Ambani Group (ADAG), remains in the race for the prestigious $900-million highway project in Nepal, expected to boost development in the southern Terai plains, top officials said.

Expression of interest for the four-lane, 76-km highway was invited in 2009 to connect the capital city with the Terai plains, which will reduce travelling time to just about 90 minutes.

R-Infra and South Korea's Landmark Worldwide had made the shortlist.

But local firms here protested the eligibility criteria - a net worth of at least $150 million or a track record of completing any infrastructure project worth at least $900 million in the last five years.

Accordingly the Public Accounts Committee of parliament asked the physical planning and works ministry, which is executing the project, to shortlist more companies. Now, the ministry has re-invited expressions of interest with February 27 as the deadline.

"However, Reliance and Landmark are still on the shortlist," said Tulsi Prasad Sitaula, joint secretary at the ministry. "We informed them of the parliamentary order and told them they were welcome to make a fresh application."

The Kathmandu-Terai Fast Track project is also linked to the proposed construction of Nepal's second international airport at Nijgadh town in Bara district on the Indo-Nepal border.

Sitaula said Reliance has affirmed its interest in the project and has picked up the new expression of interest document.

Physical Planning and Works Minister Bijay Kumar Gachhedar reportedly told the Public Accounts Committee that the yardstick was kept high to pre-empt the problems plaguing the energy ministry.

The ministry had awarded licences to small players to develop power projects, only to have them hang on to the licences to look for a buyer.

The Terai highway is to be executed through a public-private partnership on a build-own-operate-and-transfer basis. The Asian Development Bank conducted a feasibility study in 2008 and estimated the project cost to be around $800 million.

Now, thanks to the delay, it is likely to have shot up to $900 million.