Ministers summoned over delay in national priority projects

- POST REPORT, Kathmandu
Ministers summoned over delay in national priority projects

Sep 24, 2014-

Expressing concern over the delay in the development of two national pride projects -- Kathmandu-Tarai Fast Track and Second International Airport (SIA) in Nijgadh, Bara -- the Parliament’s Development Committee has summoned the ministers concerned.

After its meeting with the chief of the Fast Track project and officials of the Tourism Ministry on Wednesday about the progress made so far, the committee summoned Tourism Minister Deepak Chandra Amatya, Physical Planning, Infrastructure and Transportation Minister Bimalendra Nidhi, Finance Minister Ram Sharan Mahat and National Planning Vice-chairperson Govinda Raj Pokharel.

According to committee members, the ministers will be asked to furnish reasons for the delay in the project construction. “We are concerned why these national pride projects are moving at slow pace despite the government allocating sizeable funds annually. Hence, the ministers have been summoned before Dashain,” said the committee’s Chairperson Rabindra Adhikari.

Adhikari said Rs 500 million allocated for the Fast Track remained unspent last fiscal year, and not much progress has been seen this fiscal year as well.

The government had prioritised the Fast Track project with an aim to establish a direct high-speed link between Kathmandu and other major cities linking the markets in Nepal and India. However, the 76km Kathmandu-Nijgadh expressway project it has been struggling to attract investors.

With its earlier efforts to attract investors not yielding desired results, the government has sought to give build, operate and transfer (BOT) model a second try to develop the project. Two weeks ago, the  Physical Planning Ministry called expression of interest (EoI) from interested international investors by sweetening the criteria with assurance of a minimum revenue guarantee and the government’s 20 percent stake in the project.

The government sweetened the deal as previous bidders abandoned the project seeing scant chances of being able to make much money from it. In order to guarantee the minimum vehicle movement, the government has assured if the traffic is less than expected, the developer will be compensated based on the toll fee determined in consensus with the government. And, if vehicular movement is greater than the fixed level, the developer would have to share the income from additional vehicular movement on a 50:50 basis.

The government’s EOI notice has asked applicants to submit their applications before October 11. As per the notice, only applicants having past experience in building highways, tunnels and bridges costing more than $1 billion on BOT basis over the past 10 years and a net worth of $150 million or more jointly or severally may apply. The government said bidders involving Nepali contractors as equity partners would be given preference.

The project involves survey, design, engineering, financing, procurement, construction, operation, maintenance and transfer of the approximately 76km Kathmandu-Nijgadh Expressway and a 18km additional two-lane expressway on the existing two-lane road (making a four-lane expressway) of the Nijgadh to Pathlaiya section of the East West Highway

The progress on the SIA is much worse than the Fast Track. Nothing substantial has happened after the Detailed Feasibility Report prepared by Korea’s Landmark Worldwide (LMW) was submitted to the Tourism Ministry in April 2011. Since then, the report has been stuck at the high-level BOOT committee of the National Planning Commission (NPC). The company had conducted the study at a cost of $3.55 million.

Two days before he was removed, then Tourism Minister Bhim Acharya had ordered his ministry to form a committee to develop the SIA and Tribhuwan International Airport under public private partnership model.

The ownership row over the project between Tourism Ministry and Investment Board Nepal (IBN) also hit the SIA. Though the SIA comes under purview of the IBN, Tourism Ministry has been looking to bring back the project under its fold, amid no sign of progress.

Published: 25-09-2014 09:48

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