MoU for DPR of Fast Track road inked

KATHMANDU:

The government has signed an agreement for preparation of detailed project report (DPR) of the much talked about Kathmandu-Tarai Fast Track road. This has taken the development of the project to the next level, as there have been no detailed study on the project so far.Based on the agreement, the Indian lowest bidding party — a consortium of Infrastructure Leasing and Financial Services (IL&FS) Transportation Networks, IL&FS Engineering and Construction, and Suryavir Infrastructure Construction — will complete the study within four months. And, it will be presented for evaluation and approval to the government.

Immediately after extensive discussion regarding the project in the Development Committee of the Legislature-Parliament earlier today, the Ministry of Physical Infrastructure and Transport (MoPIT) signed the memorandum of understanding (MoU) for the study in the afternoon. Satyandra Shakya, chief of Fast Track Road Project and Mukunda Gajanan Sapre, executive director of IL&FS Transportation Networks representing the consortium had signed the MoU amid a function.

With the consortium seeking minimum revenue guarantee (MRG) of Rs 317 billion to undertake the project and no clear idea on the financing cost of the project, the government had decided to go for DPR study first. “This study will give us a clear picture regarding the cost, traffic and how viable the project is,” said Physical Infrastructure Minister Bimalendra Nidhi.

According to Nidhi, after the preparation of DPR, the government will have other options as well — to assign it to the bidder or undertake the project by itself, among others. Lately the government is being advised to build the project with its own investment, as the plan to get it done under the build, own, operate and transfer (BOOT) model is taking long owing to developer selection procedure and confusion related to the project cost.Conditions set on the MoU require the IL&FS consortium to prepare DPR of 76-km expressway and upgradation of the 18-km Nijgadh-Pathalaiya to four lanes and bear the cost of the study.

“The idea is very simple — both the parties work together to give the best possible solution to the government,” said Sapre, after signing the MoU. He said that they would optimise the financing cost of the project and then go to the government for negotiation. To evaluate the DPR of the IL&FS consortium, the government is also soon appointing an independent consultant.

Tulasi Prasad Sitaula, secretary of MoPIT, said that the government will hold the right to approve or reject the DPR. He added that the bidder will get to sign the concession agreement to develop the project only after the report gets approved and the negotiation is successful.

Until yesterday, the Indian bidder had been demanding that the government agree to pay fee of Rs 600 million for the DPR and sign MoU accordingly.A source at MoPIT, however, claimed both the parties signed the pact in haste fearing all the progress achieved so far would go to waste, especially with mounting pressure on the government to implement the project with its own resources.

Source:THT