Govt to issue RfP for Fast Track road in a week

KATHMANDU:

The government is preparing to issue request for proposal (RfP) of the Kathmandu-Tarai Fast Track road within a week with a target to select a bidder by mid-January, 2015. This time, shortlisted firms will get less time to submit their proposals.

For the RfP stage, the Ministry of Physical Infrastructure and Transport (MoPIT) recently shortlisted all three Indian bidders that had submitted expression of interest (EoI). A consortium of Infrastructure Leasing & Financial Services (IL&FS) Transportation Network, IL&FS Engineering and Construction and Suryavir Infrastructure Construction along with Reliance Infrastructure and Oriental Structural Engineers of India had applied to build the 76 km expressway.

Satyandra Shakya, project manager of the Fast Track Road said that they notified the shortlisted firms on Tuesday and will issue a notice within a week asking them to submit their technical and financial proposals. “We want to reach an agreement with a potential bidder within mid-January by completing all procedures,” he added.

The financial proposal of only those firms that bag a minimum of 60 marks in the evaluation of technical proposal will be looked into, according to MoPIT. And the government will select a bidder that proposes the lowest cost for the project and quotes the least ‘minimum revenue guarantee’.

The project is expected to cost around Rs 100 billion and the investor will have to make returns and profits within 25 years of operation of the road. The government will also provide Rs 15 billion as grant (excluding the cost of land required for the project) in the form of equity support, according to MoPIT.

After all previous efforts to rope in a developer cum investor in the project failed, the government this time has assured of guaranteeing minimum revenue or traffic flow in the proposed road that connects the Capital with the Tarai and Second International Airport planned in Nijgadh, Bara. IL&FS had also suggested the government to guarantee minimum traffic to attract investors.

Ensuring minimum revenue or traffic in the project means the government will fix minimum traffic level based on the bidders’ proposals and if the developer bagging the project fails to witness movement fixed in the provision, the government will provide subsidy in proportion to the reduction in the traffic. MoPIT officials said that they are planning to provide a maximum time of one month for the firms to submit technical and financial proposals.

Last year, the government had provided a time of up to nine months to submit RfP to three Indian firms, including IL&FS and Reliance, which were also shortlisted in the previous EoI called for the project. However, they did not submit RfP citing risk in investment.

Source: THT