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Govt gives okay to buy DPR for expressway
The government has given the green signal to buy the detailed project report (DPR) for the Kathmandu-Tarai expressway, pushing the scheme one step closer to construction.Bibek Subedi
The government has given the green signal to buy the detailed project report (DPR) for the Kathmandu-Tarai expressway, pushing the scheme one step closer to construction.
The DPR for the 76-km superhighway was prepared by an Indian consortium in 2015. It had expected to build the road too but was subsequently pushed out of the contract race.
A Cabinet meeting on Friday authorized a six-member committee to negotiate and purchase the DPR from the Indian consortium.
It consists of Infrastructure Leasing and Financial Services (IL&FS) Transportation Networks, IL&FS Engineering and Construction and Suryavir Infrastructure Construction.
The panel, consisting of representatives from the Nepal Army, Defence Ministry, Physical Infrastructure and Transport Ministry, National Planning Commission and Finance Ministry, has already been studying the DPR.
“Following this decision, the committee has full authority to start negotiations and purchase the DPR,” said Rajendra Kishore Chettri. “There is no need for another approval from the Cabinet on the price of the DPR.”
The committee will ask the Indian consortium the price of the DPR and try to negotiate it down as much as possible, according to a highly placed army source. “The price at which we will purchase the DPR will be accurate and realistic,” said the source.
After acquiring the DPR from the Indian consortium, the army will decide the modality under which it will develop the expressway.
It has indicated that it will call for global tenders to hire a contractor and a consultant for the construction of the highway.
A high-level committee formed under the vice-chairman of the National Planning Commission (NPC) had then suggested to the government to build the project itself using the DPR prepared by the Indian company to save time and expense. The committee submitted its report to the government last February.
The Indian consortium had originally been appointed to build the expressway, but the government scrapped the agreement last December following widespread criticism and decided to hand over the project to the army in May.
The government’s decision to award project to the Indian company was criticised after the then government led by Sushil Koirala decided to offer the Indian consortium a minimum revenue guarantee of up to Rs15 billion annually if traffic failed to generate adequate profits. It had also proposed to extend a loan to the developer at a subsidized interest rate.
The plan fell apart after the Supreme Court issued an interim order in October 2015 against awarding the project to the Indian consortium. Subsequently, the KP Sharma Oli administration made a fresh decision to build the project by mobilising the government’s own resources.
The Pushpa Kamal Dahal-led government gave continuity to the plan. A Cabinet decision in December to terminate past agreements and decisions cleared all obstacles for the government to build the project on its own.