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KTM-Tarai Fast Track: Panel seeks 15 more days to complete study
A committee formed to recommend modalities for implementation of Kathmandu-Tarai Fast Track project has sought 15 more days to complete its study and submit the report to the government.A committee formed to recommend modalities for implementation of Kathmandu-Tarai Fast Track project has sought 15 more days to complete its study and submit the report to the government.
A seven-member committee was formed under National Planning Commission Vice Chairman Min Bahadur Shrestha on December 22 after the government scrapped all the agreements with an Indian consortium that was shortlisted as the potential builder of the expressway.
The committee was asked to submit a report within a month of commencing the study. The committee had started its work after about two weeks of its formation.
“It has now been deemed that the timeframe [of one month] would not be sufficient to complete the study,” a reliable source said. “That’s why permission for extension of deadline by 15 days has been sought.”
The committee is seeking more time so as to initiate dialogue with the Indian consortium that prepared the detailed project report of the 76-km fast track, which is expected to reduce travel time from the country’s capital to Nijgad in the south to less than an hour.
“Since the government has already decided to build the project on its own, the committee is considering on requesting the government to acquire the report from the Indian consortium if it agrees to sell it for a reasonable sum,” the source said,
adding, “The committee will soon hold talks with the consortium.”
The committee is mulling over requesting the government to purchase the document, because if the process of preparing the detailed project report is restarted, it would take another one to two years to complete it. “This delay will increase the cost of project by around 6 to 7 percent per year if inflation is adjusted, and inflict intangible losses emanating from fuel consumption and wear and tear of vehicles operating on existing highways,” the source said.
If the consortium seeks “reasonable amount” and the government agrees to the committee’s proposal to acquire the report, a separate committee will have to be formed which will formally determine the compensation amount that needs to be extended to the Indian firm.
The government, in March 2015, handed over the task of preparing the detailed project report of the fast track to a consortium comprising Infrastructure Leasing and Financial Services (IL&FS) Transportation Networks, IL&FS Engineering and Construction, and Suryavir Infrastructure Construction.
At the time of its appointment, the consortium had agreed not to recover the cost that had gone into preparing the report, if it was allowed to build the project.
After the report was submitted in June 2015, the late Sushil Koirala-led government had even started making preparations to award the project to the Indian consortium.
But questions were raised over the intention of the Koirala-led government after it decided to provide an annual minimum revenue guarantee of $150 million to the project developer. This meant if the traffic was low on the proposed toll-way and annual earnings stood at, say, $50 million, the government would extend remaining $100 million to the developer every year in compensation.
At that time the government had also started exploring the possibility of getting a fresh soft credit line of up to $750 million from India and extend it to the Indian consortium at lower interest rate to support the project’s construction.
These facilities raised eyebrows of many and the issue reached the Supreme Court, which issued an interim order, bringing the process of handing over the project to the Indian consortium to a complete halt.
As this process became controversial, the government, in December, scrapped all the agreements reached with the Indian consortium and took a formal decision to build the project on its own.