Govt to sign final agreement within two weeks

KATHMANDU, APR 28 -

The government is set to sign a final agreement with Nepal Purbadhar Bikas Company (NPBC) within the next two weeks for the development of the Kathmandu-Hetauda Tunnel Highway.

The agreement had been delayed after the Ministry of Physical Infrastructure and Transport asked NPBC to come up with a convincing business plan. Also, the issues related to the alignment overlapping the Kathmandu-Tarai Fast Track road were unresolved.

A 3.5-km stretch on the Kathmandu side of the tunnel highway overlaps the alignment of the Kathmandu-Tarai Fast Track road. The ministry had asked the NPBC to either avoid the overlapping or come up with ideas on how the alignments could be integrated without affecting the interests of investors.

“We plan to resolve all the issues and sign a concession agreement within the next two weeks,” said Tulasi Prasad Sitaula, secretary at the ministry. He said the agreement had been delayed as the talks on technical issues such as those related to the alignment were underway.

NPBC had originally planned to start the construction by mid-February after signing the concession agreement with the government. The company has been demanding the government permit it to operate the road under the Build-Operate-Transfer (BOT)  modality to make the project more attractive and increase the payback period as the project is the first big infrastructure project being undertaken involving the locals.

As per the BOT Act, private companies should hand over such projects after 30 years of operation. Lal Krishna KC, vice-chairman of NPBC, said the work on conditions to be put in the agreement is underway. “The toll rate, operation period and facilities to be offered from the government side are important for the final agreement,” he said.

The 51-km tunnel highway will cost more than Rs 25 billion and will be completed in four years. The Federation of Nepalese Chambers of Commerce and Industry, Federation of Contractors’ Association of Nepal, Non-resident Nepalese, District Development Committees (Kathmandu, Lalitpur and Makawanpur), Village Development Committees and the general public are investing in the project. According to NPBC, around two dozen banks have also expressed interests to fund the project.

According to ministry officials, the addressing the demands that the operation period be increased to 35 years, VAT and tax holiday and the alignment matter could also require the Cabinet’s approval.

Earlier, NPBC had proposed options to the government that the tunnel highway can be taken along the Bagmati River to avoid alignment overlapping. However, the government has also decided to take the Fast-Track alignment along the Bagmati River after the locals of Khokana, Lalitpur, refused to give their land for the highway .

Source: The Kathmandu Post