Wednesday, May 16, 2018

IBN to publish detailed feasibility study notice for metro rail tomorrow

The Investment Board Nepal (IBN) is publishing a notice seeking expression of interest (EoI) to conduct the detailed feasibility study of the Nagdhunga-Koteshwor-Dhulikhel metro rail project tomorrow.
The 21-day notice for Route Number 2 of the metro rail project will be open for all national and international companies, according to the board.
According to the chief executive of the board Maha Prasad Adhikari, Route Number 2 of the metro rail project comprises Nagdhunga-Kalanki-Koteshwor in the Kathmandu Valley and Dhulikhel of Kavre district. "It will be 37-km long," he said, adding that the preliminary study of the project was jointly prepared by the Department of Railways and Japan International Cooperation Agency (JICA).
The government had earlier on April 30 directed the board to prepare a detailed feasibility study of the Nagdhunga-Kalanki-Koteshwor-Dhulikhel section (Route Number 2) of metro rail project. The 30th executive board meeting held under the chair Prime Minister KP Sharma Oli had mandated the board to conduct detailed feasibility study.
The board that is planning to select a company within six months. The shortlisted company will have to complete detailed feasibility study within 15 months.
"The detailed feasibility report will give a clear picture of investment model of the project," Adhikari sadi, adding that and the detailed project report will also make clear actual cost and time that will be required to build the project.
The metro rail will be operated under the public-private partnership (PPP) model, he said, adding that the board will select a company that also has experience of building projects under the PPP model, though the domestic companies have almost no experience of building any project under PPP model.
Likewise, the proposed Route Number 1 of extends from Budhanilkantha in Kathmandu to Satdobato and Khokana in Lalitpur. The $800-million monorail project has been delayed also due to the disagreement with yet another company earlier.
Earlier, the board was planning to sign a memorandum of understanding with Kathmandu Monorail Company (KMC). But the board has postponed signing since the company failed to fulfill all the requirements, it had agreed earlier.
The board had written a letter to prospective builder on May 3 asking it to deposit the performance security, according to the preliminary Memorandum of Understanding (MoU). But the company was unable to deposit Rs 100 million that was required as performance security forcing the board to search for new company, the board informed. "It has failed to deposit the performance guarantee."
However, the company – that was planning to construct the Kathmandu Monorail Project under build, own, operate, transfer (BOOT) model – said that it is not convinced with three clauses in the MoU, though it had shown interest earlier. "We are not comfortable with the clause that the company will have to forfeit the deposit amount as performance security, if it is unable to complete the DPR on time,” said chairman of the company DN Thapa.
Likewise, the company has also reservations on right of the DPR. According to Thapa, the company is also unhappy about the clause that reads that 'if the government is not satisfied with the DPR, it can ask another company to prepare a new DPR.'
The board has given Kathmandu Monorail Company two days to deposit Rs100 million as performance guarantee before signing the deal.
Two years ago, the company had submitted a proposal to the board showing its willingness to build the monorail along the ring road in the Kathmandu Valley. After receiving the proposal, the board – in consultation with National Planning Commission (NPC) – had formed a committee under the leadership of a member of the planning commission.
After committee has recommended the board to let Kathmandu Monorail Companyt to prepare a DPR for the project. The panel had also suggested the board to include a provision in the understanding clearly stating that the government will not bear the cost of the DPR, if the project is dropped meaning if the board – by any chance or condition – decides against developing the monorail project, it will not be liable to pay the company for the DPR. Likewise, if the board decides to award the construction project to some other developer, Kathmandu Monorail Company will receive payment only if the other party agrees to purchase the report.
The builder found the clauses unacceptable forcing the board to call for new expression of interest to conduct the detailed feasibility study.

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