KTM-Hetauda Tunnel Highway gets letter of permission

KATHMANDU, MAY 22 -

A week after signing the concession agreement, the Ministry of Physical Infrastructure and Transport on Tuesday issued the letter of permission to Nepal Purbadhar Bikas Company (NPBC), paving the way for the latter to start the construction of Kathmandu-Kulekhani-Hetauda Tunnel Highway.

Tulasi Prasad Sitaula, secretary at the Physical Infrastructure Ministry, handed over the letter to NPBC Chairman Kush Kumar Joshi.

NPBC has targeted to complete the construction of 58-km highway within four years, making Hetauda only an hour’s drive away from Kathmandu.

The highway that will start from Balkhu in Kathmandu will have three tunnels with a distance of 4.5 km in Chobhar, Kulekhani and Bhaise to reach Hetauda.

The project, which is being executed under the private, public and people’s partnership (4Ps) model based on the Private Financing in Build and Operation of Infrastructure Act 2006 (BOOT Act), is estimated to cost Rs 34.5 billion.

“This has become the first project to be implemented under the BOOT Act,” said Situala.

He said the operation of the highway would cut the travel distance and help save around Rs 15 billion a year, reducing fuel consumption. He directed NPBC to present a financial closer within a year as per the concession agreement.

As per the agreement reached with the government last Tuesday, the company has to present the financial closer within a year to assure the government about the resources required to construct the highway. The highway will be handed over to the government after 30 years (in 2043) of operation based on the BOOT Act.

Sitaula said the government will continuously monitor the project and provide support. The highway is the second large-scale highway project after the Kathmandu-Tarai Fast Track road, which is also planned under the BOOT modality.

Joshi said the project is a “challenge as well as opportunity” as it is the first road project being developed using local resources and expertise. “We will be able to pay back to the investors within 8-12 years,” he said, adding the toll rate has been fixed in the range of Rs 160 to 3,000 per vehicle depending on their types.

The Federation of Nepalese Chambers of Commerce and Industry, Federation of Contractors Association of Nepal, bank and financial institutions, Nepal Association of Foreign Employment Agencies, Non-resident Nepalese, around 200,000 general people and local government bodies of Kathmandu, Lalitpur and Makawanpur are investing in the highway. NPBC said they will start the construction within a month.

Source: The Kathmandu Post