Nepal to undertake $1.05-bn fast-track road project

Abandoning its earlier decision to develop the Kathmandu-Terai fast-track road project under the public-private partnership (PPP) model, Nepal's ministry of physical infrastructure and transport plans to implement it with direct government investment.

The ministry is planning to take a soft loan from the World Bank for the project. The fast-track road is projected to cost 100 billion Nepalese rupees ($1.05 billion), Xinhua reported.

The four-lane project is intended to link Nepal's capital with Terai and other southern border areas, cutting down travel time to four hours, which otherwise takes around eight hours.

Prospects for the much talked about 76-km expressway had remained uncertain in the third week of September after none of the three short-listed Indian firms submitted the request for proposal to undertake the project.

Indian firms like Reliance Infrastructure, Infrastructure Leasing & Financial Services (IL&FS) and Larsen and Toubro (L&T) Infrastructure Development Projects had applied for the project development after the government floated an expression of interest for it.

"We have been in negotiation with World Bank group for taking soft loan for the project construction," Tulasi Prasad Sitaula, secretary of the ministry of physical infrastructure and transport, told Xinhua Thursday.

He added the World Bank has shown interest in giving a soft loan for the project worth $500 million.

Previously, the project had been designed to be developed under build, own, operate and transfer (BOOT) model.

"The ministry has finally decided that the project should be directly invested in and undertaken by the government itself so as to ensure its successful implementation," added Sitaula.

He said his ministry is forwarding the proposal to the National Planning Commission (NPC) Friday. Once the NPC gives its nod to the project's development, Nepal's finance ministry will have a final loan agreement with the World Bank.

The government has already invested around 2 billion Nepalese rupees ($21 million) for land acquisition and for track opening from Chhalnakhel, the beginning point of the project, to Nijgadh, the ending point.

At present, passengers have to cover about 157 km from Kathmandu to Nijgadh if they travel along Tribhuvan Highway and about 254 km if they opt for Narayangadh-Mugling-Kathmandu road. The proposed fast-track road, however, will be only about 76kms long.