SC stays bid to award Fast Track deal

- Post Report, Kathmandu

Oct 9, 2015-

The Supreme Court on Thursday issued an interim order, temporarily halting the government’s preparations to award the 76-km Kathmandu-Tarai Fast Track project to an Indian developer.

Responding to a writ petition, a single bench of Chief Justice Kalyan Shrestha asked the government not to go ahead with awarding the project to a consortium of Infrastructure Leasing and Financial Services (IL&FS) Transportation Networks, IL&FS Engineering and Construction, and Suryavir Infrastructure Construction.

On Wednesday, Advocates Purna Bahadur Rai and Bhairaja Rai had filed the writ arguing that the decision to award the project to the Indian developer was against national interests, which would burden the government financially in the long run.

The government has been asked to clarify the reason for awarding the contract to the Indian firm. The court has asked the government to wait until the SC holds discussion with both the parties—Nepal government and the petitioners—by October 28.

Even as Physical Planning and Transport Minister Bimalendra Nidhi has tabled a proposal in the Cabinet to award the project to the developer, the major parties are sharply divided over it.

While Nepali Congress leaders are attempting to choose the Indian firm as

the developer, leaders from the CPN-UML and the UCPN (Maoist) strongly oppose the move.

Saying that the cost is “extremely high”, UML and Maoist leaders have demanded reviewing the project. They argue that the country should not bear a huge cost in minimum revenue guarantee while the government has promised the developer Rs75 billion as loan at just 3 percent interest. The government has also pledged Rs15 billion in equity investment.

According to an estimate, a minimum of 23,858 passenger car units (PCU) should ply the road a year for the government not to pay any amount in minimum revenue guarantee. The PCU is calculated on the basis of a car, while a bus is considered two cars, truck as three cars and motorcycle as half a car.

Experts criticise contract terms

Experts have questioned the financial viability of the project, saying that the government was taking an unnecessary risk in the form of minimum revenue guarantee.

Speaking at an interaction in the Capital on Thursday, engineer and policy analyst Surya Raj Acharya highlighted the faults of the proposal.

“The current plan is made on ad hoc basis relying on the feasibility report of the ADB that only shows the indicative cost. It is neither a build-operate-transfer project nor a public-private-partnership project with viable results,” he said. He suggested safeguarding national interests and focusing on domestic capacity building through national contractor consortium, or adopting alternative projects such as electric railway in the future.

Director of Kalika Construction Nicholas Pandey said accepting the current terms of the project would lead to heavy financial losses. (PR)

Published: 09-10-2015 08:39

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