The progress of the road projects under the Indian Line of Credit (LoC) is far from satisfactory, largely due to delay in project preparation and land acquisition on the part of Nepali side and delayed approval from the Indian side.

During the recently concluded meeting, the first one, of an oversight mechanism comprising Nepali and Indian officials, both sides have agreed to expedite works to complete the projects in a time-bound manner.

Of the $460 million Indian soft loan for road projects under the LoC, only $62 million has been spent so far.

The snail-paced progress can be gauged by the fact that it took almost seven years to complete the road projects under the first Indian LoC that was signed in 2007.

Road projects under the first line of credit worth $50 million were completed in 2013-14.

Same is the story under the second LoC.

A total of $80 million has been provisioned under the second LoC, agreement for which was signed on October 21, 2011.

“Only $12 million has been spent so far,” said Bed Kantha Yogol, coordinator of Road Improvement Project (RIP) under the Department of Roads (DoR), which deals with the India-funded road projects. “Till now, only 20 percent of construction has been completed.” DoR officials admit that progress in the road projects has been dismal. “On our side, poor preparation before the signing of the loan agreement, land acquisition related problems and lately the ban on extraction of construction materials are the main problems,” said a senior DoR official.

“However, absence of Indian contractors in the field and mandatory requirement of fulfilling 51 percent of Indian components in procurement of goods necessary to construct the roads have also slowed down the projects,” said the official. “We have to ensure that Indian contractors get the contract, but they are hardly present in the field. This results in coordination problem.”

According to Yogol, it took three years to begin works under the first LoC and projects were completed one year later than initially planned. The projects under the second LoC also faced similar problems with the DoR taking four years to award the contracts.

The DoR started awarding the contracts only in 2014-15 while the construction of almost all projects began in 2015.

“Immediately after awarding the contract of most of the projects, the country plunged into political turmoil with Madhes protests and Indian blockade,” said Yogol, adding that construction works of almost all road projects were further hit by fuel crisis due to border blockade.

Among the projects under the second LoC, the most dismal progress is recorded in Rs 1.95-billion Janakpur Ring Road Project. Only eight percent of construction has been completed.

“There are land acquisition related problems in a number of locations, particularly in rural areas,” said project chief Rajendra Prasad Das.

As far as the projects under the third phase of LoC are concerned, Nepal is awaiting the southern neighbour’s approval to the detailed project report (DPR) of various roads under the third LoC, according to the DoR. Nepal has sent the DPR of the roads and Mahakali Bridge to India in September. “We have asked the Indian side to speed up the process of approving the DPRs so that we can issue tender notice as early as possible,” said Yogol.

Nepali officials have requested India to approve the DPR of projects being implemented under the third LoC at the earliest in a recent meeting of the oversight mechanism. “During the meeting, we agreed on getting approval from the Indian side through a video conference,” said Yogol, adding that they had planned to issue tender notice in November. “Now, our target is starting construction works in these projects from February and complete them in 30 months,” he added.

Total credit line $460 million

Phase     Amount    Status

First Line of Credit    $50 million    Project completed

Second Line of Credit    $80 million    Only 20 pc completed

Third Line of Credit    $ 330 million    Work yet to start