Monday, May 14, 2012

Government awards Kathmandu-Hetauda highway construction to private sector under BOOT


Ministry of Physical Planning and Works and Nepal Infrastructure Development Company (Nepal Purbadhar Bikas Company) today signed an agreement to construct a multi-billion dollar Kathmandu-Kulekhani-Hetauda tunnel highway under Build Operate Own and Transfer (BOOT) model.
"The ambitious tunnel highway is estimated to cost around Rs 20 billion," said immediate past president of Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and coordinator of the Users’ Community Group of the highway Kush Kumar Joshi after signing the agreement.
"The company is planning to mobilise funds from four parties — private sector, locals, government, Non Resident Nepalis (NRNs) and financial institution — and each party will have 25 per cent stake," he said, adding that the Detailed Project Report (DPR) will be prepared within six months according to the agreement.
"The construction of the tunnel highway will complete in three and half year,” Joshi informed.
The project will encourage domestic investors to invest in big infrastructure projects by mobilsing local resources, Joshi added. "The project will also pave ways for the possibility of multi-billion projects utilizing domestic fund, management and investors."
The first multi-billion infrastructure to be constructed from the locals' stake — Kathmandu-Kulekhani-Hetauda tunnel highway — is also the first project after the introduction of Build Operate Own and Transfer (BOOT) Act in 2006, according to the vice chairman of National Planning Commission Deependra Bahadur Kshetri. "The success of tunnel highway will also send a positive message to other projects which the government wants to construct under Public Private Partnership model," he added.
Prime Minister Dr Baburam Bhattarai urged the construction company to complete the project within stipulated timeframe. "The failure of the project will send a negative message of the BOOT model," he reminded.
The 50-km highway will have three kilometer tunnel from Kulekhani to Bhimphedi of Makawanpur, according to the company.
The agreement has noted that the four-lane road will be constructed from Kathmandu to Hetauda that will shorten the road distance to only an hour from current five hours.

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