Govt prepares to call RfP for Fast Track road

KATHMANDU:

The government is likely to appoint a developer to build the much awaited Kathmandu-Tarai Fast Track road project this year. Ministry of Physical Infrastructure and Transport (MoPIT) is preparing to invite new request for proposal (RfP) with a target to complete the detailed project report (DPR) by mid-January, 2015.

With the plan to build the 76-km expressway linking Kathmandu with Bara, Tarai taking longer than anticipated, the budget for current fiscal year has aimed to complete DPR and start construction within mid-July, 2015. MoPIT officials said a developer selected after RfP evaluation will prepare the DPR.

“Since MoPIT has already received a go-ahead from National Planning Commission and Ministry of Finance, a fresh RfP will be issued soon to select a developer,” said Tulasi Prasad Sitaula, secretary of MoPIT. According to him, any developer interested can apply for the project directly as the procedure of expression of interest (EoI) will be skipped this time.

Last year, the government had called RfP only from those firms shortlisted from the EoI evaluation. MoPIT officials said that since the shortlisted companies did not submit their proposals last year and the procedure requires more time, they had decided to call RfP directly by guaranteeing minimum traffic and facilities like

‘viability gap funding’.

Ensuring minimum traffic in the project means the government will fix minimum traffic level and if developer fail to witness movement fixed in the provision, the government will provide subsidy in proportion to the reduction in the traffic. Similarly, viability gap funding is a provision under which the government pitches in a portion of total cost to make the project viable.

MoPIT estimates that there is possibility of 3,000 units of vehicles plying on the route in a day at present and the number is expected to increase to around 6,000 units after five years. MoPIT officials said that the minimum traffic guarantee model will require the government to pay $150 to $200 million in total to the developer

as subsidy.

To attract investors in the project estimated to cost Rs 100 billion, current fiscal year’s budget has also stated of ensuring minimum traffic in the proposed expressway and talked of providing other facilities to undertake the project in the build, own, operate and transfer (BOOT) model under public-private partnership. The project

has been allocated Rs 250 million for the current fiscal year to complete pre-construction works.

Potential bidders, including Indian company Infrastructure Leasing & Financial Services (IL&FS) last year had also urged the government to guarantee minimum traffic, citing risks in the project. Sitaula said that many firms, including some which were shortlisted for last year’s RfP, have shown interest to build the Fast Track road. “Since we are mulling over calling for new RfP, we are not responding them,” he added.

Among others, World Bank has also expressed interest to support the Fast Track road project. The bank in its Country Partnership Strategy Fiscal Year 2014-18 for Nepal has included a plan to provide a total of $200 to $300 million under International Development Association (IDA) lending programme for hydropower project or IDA programme and Fast Track road.

Source: THT