Indian firm seeks 3 bn for Kathmandu-Tarai expressway DPR

Indian firm Infrastructure Leasing and Financial Services (IL&FS) has presented a bill worth Rs3.17 billion spent on a detailed project report (DPR) for the Kathmandu-Tarai Expressway in 2015.

On Sunday, the Indian consultant asked the Ministry of Physical Infrastructure and Transport to make payment for the costs incurred as the Nepal Army, the project developer refused to purchase the DPR, Kathmandu Post reported.

Nepali Joint Secretary Ram Hari Pokhrel, said the letter from the Indian company has put us in a fix. He said they will have to go through the memorandum of understanding (MoU) signed with the Indian company.

The Indian consortium, in July 2015, submitted a report to the ministry regarding the construction of 76-km expressway connecting Kathmandu with the southern plains.

The then Sushil Koirala-led government was preparing to award the project to the Indian consortium. It was decided that an annual minimum revenue guarantee of Rs15 billion would be provided if the road toll failed to generate adequate profits.

The government had to scrap all the agreements reached because of this controversy and decided to construct it with domestic resources.

On May 4, 2017, the project's responsibility was handed over to the army with the authority to purchase the DPR from the Indian company.

However, the army decided against purchasing the DPR saying that it was incomplete.

This is why, the Indian company in order to recover the expenses incurred during the preparation of the report, had to go for arbitration.