Govt likely to grant NPBCL extra time
KATHMANDU:
Amid Nepal Purbadhar Bikas Company Ltd (NPBCL) finding it difficult to collect resources to fund the Kathmandu-Kulekhani-Hetauda Tunnel Highway, the government is mulling over giving it extra time for its financial closure.
The Ministry of Physical Infrastructure and Transport (MoPIT) is preparing to extend the time for the financial closure till April 30, 2015 to the project developer as demanded. Financial closure means that the developer has adequate resources to undertake the project. The estimated cost of the four-lane road project is Rs 35 billion.
The tunnel highway is aimed at linking the Capital with Hetauda within one-hour drive. MoPIT and NPBCL had signed an agreement to build the tunnel road in May 2013. Based on the terms of conditions, the developer had also submitted the financial closure document in May this year to the government. However, a technical committee of MoPIT after studying the financing plan had concluded that the closure was not convincing to fund the tunnel highway.
NPBCL had requested MoPIT to extend the financial closure date after the technical committee found that its funding plan was unsatisfactory, according to Rabindranath Shrestha, joint secretary at MoPIT.
“We are yet to decide regarding the time extension,” he added.
As per the agreement reached with NPBCL, the government can provide extra time for financial closure if there are valid reasons to do so.
MoPIT officials are of the view that since the developer is trying to rope in project financers from Canada, additional time should be granted.
After finding it difficult to attract local investors in the project, the tunnel highway developer is planning to sign loan agreement of Rs 28 billion, which is 80 per cent of the total fund required for the project, with Canadian companies.
Of the total resources required for the project, NPBCL is planning to invest 20 per cent as local funding from promoters and locals. Originally, the company had planned to collect 50 per cent resources from the domestic market. But owing to low response in investment, it had reduced the local equity from 50 per cent to 20 per cent.
Meanwhile, a team of experts representing Canadian project financers is visiting Nepal soon to assess the tunnel highway project, according to NPBCL.
Earlier in August this year, three Canadian firms — Infrabanx Corporation, Shej Global Canada and Global Financial Services Canada — had also agreed in principle to finance the tunnel highway and make credit available for a minimum period of 15 years.
On Tuesday, NPBCL had also approached MoPIT with a request to facilitate in providing visa and work permit to experts visiting Nepal.
Source: THT
