Valley
Govt to annul Fast Track deals with Indian firm
The government has decided to terminate all memoranda of understanding and decisions reached with an Indian consortium that was preparing to build the 76-km expressway linking Kathmandu with Nijgadh, Bara.Sangam Prasain
The government has decided to terminate all memoranda of understanding and decisions reached with an Indian consortium that was preparing to build the 76-km expressway linking Kathmandu with Nijgadh, Bara.
Following the move, the government is gearing up to build the project on its own and make the highway a “public expressway”, where no toll will be levied on road users, Minister for Physical Infrastructure and Transport Ramesh Lekhak told a joint meeting of the parliamentary Finance and Development committees on Sunday.
The plan to build the expressway that will cut travel time between Kathmandu and Nijgadh to an hour from the existing 8-10 hours has remained on the government’s drawing board since 1991.
The Sushil Koirala-led government had made efforts in 2014 to award the 100 billion-rupee-project to the Indian consortium of Infrastructure Leasing and Financial Services (IL&FS) Transportation Networks, IL&FS Engineering and Construction, and Suryavir Infrastructure Construction.
However, questions were raised over the intention of the Koirala government after it decided to offer minimum revenue guarantee up to Rs15 billion a year to the developer if traffic remained inadequate to generate profits. At that time, the government had also proposed extending a loan to the Indian developer at a subsidised interest rate, drawing criticism from all quarters.
Amid the controversy, the Supreme Court, on October 8, 2015, issued an interim order, throwing cold water on the plan to award the project to the Indian consortium.
Subsequently, the KP Sharma Oli-led administration made a fresh decision to build the project by mobilising the government’s own resources.
Sunday’s decision of the incumbent government led by Pushpa Kamal Dahal is supportive of the Oli Cabinet’s move.
“Previous attempts to award the project to the Indian company had drawn strong criticism from the court, the government and the parliamentary committees, complicating the matter,” Lekhak told lawmakers.
Amid such uncertainties, according to Lekhak, there was the need for a clear decision.
“Without terminating the agreements and decisions reached in the past, it was impossible to move ahead, or build the project on our own,” he said.
Lekhak’s ministry is now planning to table a proposal to scrap all the agreements and understandings with the Indian developer at the Cabinet. A similar instruction was also issued by the joint hearing of the parliamentary committees on Sunday.
The government had shortlisted the Indian developer in September 2014 as one of the potential developers of the Kathmandu-Tarai/Madhes Fast Track Project.
On February 6, 2015, the Indian consortium, chosen as the successful bidder, was invited to sign a memorandum of understanding. Subsequently, negotiations began between the government and the firm.
Sunday’s meeting also directed the Physical Infrastructure and Transport Ministry to settle the issue related to the detailed project report submitted by the Indian consortium.
The developer has claimed that it invested Rs500-600 million for preparing the DPR.
Dhan Bahadur Tamang, secretary at the ministry, said a high-level committee led by National Planning Commission Vice-chairman Min Bahadur Shrestha has been formed to sort the issue.
The committee will submit its report assessing utility of the DPR, said Tamang. “Based on the report, the government will decide whether to take or reject it.”