Govt decides to let Army build 76km expressway

May 05, 2017

The Kathmandu Post, Sangam Prasain, 5th May 2017, Kathmandu

The government has decided to hand over the 76km Kathmandu-Nijgadh expressway project to the Nepal Army, putting all the controversy surrounding it to rest. 

A Cabinet meeting on Thursday took the decision to this effect. The much-hyped project will link the Capital with Nijgadh in the southern plains and cut travel time to less than an hour.  

The road project has remained on the government’s drawing board since 1991.

The government will fund the project and it will be constructed under the management of Nepal Army, said Minister for Physical Infrastructure and Transport Ramesh Lekhak after the Cabinet meeting. The Army will prepare a time table for the project construction within two weeks, which then will be tabled at the Cabinet for approval, he said. The Army should complete the project in four years after the time table is approved. 

“If the Army fails to complete the project on the stipulated time, the government can terminate the contract,” said Lekhak. “There will be a civilian mechanism to oversee the project.”

The government has decided to form two separate special committees to oversee the construction and supervision of the project. The management committee will be led by an Army general, which includes joint secretaries of the Physical Infrastructure, Defence and Finance ministries as the members, said Lekhak. Likewise, another supervision committee will be led by the vice chairman of the National Planning Commission (NPC) and will incorporate secretaries from the three ministries. 

“The NPC-led committee will evaluate the progress of the project and submit reports on monthly basis to the prime minister and the government,” said Lekhak. 

The government has also authorised the Nepal Army to appoint the consultant. However, contractor appointment process is not clear yet—whether it would be done through open bidding or the Army would be allowed to appoint one on its own.

Due to recurring controversies and delays, the project’s original cost estimate of Rs56 billion has doubled to Rs112 billion in seven years, which means the price tag has been swelling by Rs8 billion annually after adjusting for inflation. The Sushil Koirala-led government had made efforts in 2014 to award the 100 billion-rupee-project to the Indian consortium of Infrastructure Leasing and Financial Services (IL&FS) Transportation Networks, IL&FS Engineering and Construction, and Suryavir Infrastructure Construction.

However, questions were raised over the intention of the Koirala government after it decided to offer minimum revenue guarantee up to Rs15 billion a year to the developer if traffic remained inadequate to generate profits. At that time, the government had also proposed extending a loan to the Indian developer at a subsidised interest rate, drawing criticism from all quarters.

Amid growing controversy, the Supreme Court on October 8, 2015 issued an interim order, throwing cold water on the plan to award the project to the Indian consortium.

Subsequently, the KP Sharma Oli-led administration made a fresh decision to build the project by mobilising the government’s own resources. The incumbent government led by Pushpa Kamal Dahal supported the Oli Cabinet’s move.

Last December, the government scrapped all the agreements made with an Indian firm to build the expressway on its own.