The Nepal Army, which has been appointed by the government to build the Kathmandu-Tarai Fast Track, plans to start purchasing negotiations for the detailed project report (DPR) with the Indian consortium which prepared it.

The proposed 76-km expressway will link Kathmandu with Nijgadh in the southern plains. It is expected to cut travel times significantly.

The army will seek permission from the Cabinet through the Defence Ministry to begin talks with the Indian consortium consisting of Infrastructure Leasing and Financial Services (IL&FS) Transportation Networks, IL&FS Engineering and Construction and Suryavir Infrastructure Construction.

After the proposal is approved, the army will form an independent committee including a team of experts to negotiate the price of the DPR with the Indian consortium.

“Currently, we are reviewing the DPR internally,” said a highly placed source at the Nepal Army. “After completing the review, we will send the proposal to the Cabinet.” After acquiring the DPR from the Indian consortium, the army will decide the modality under which it will develop the expressway.

The army is yet to fix the modality under which it will build the expressway. However, it has indicated that it will call for global tenders to hire a contractor and a consultant for the construction of the highway.

The Indian consortium had originally been appointed to build the expressway, but the government scrapped the agreement last December following widespread criticism.

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 government eventually decided to hand over the project to the army in May.

The then government led by Sushil Koirala had decided to sweeten the deal by offering 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.