Monday, July 24, 2017

Nepal Army might buy DPR of expressway from Indian consortium

The Nepal Army – which has been authorised to construct the Kathmandu-Tarai expressway by the government – might buy the Detailed Project Report (DPR) from an Indian consortium to expedite the construction of the strategic road.
As the Indian consortium including Infrastructure Leasing and Financial Services (IL&FS) Transportation Networks, IL&FS Engineering and Construction and Suryavir Infrastructure Construction has already prepared the DPR of the 76-km roadway, the Army has thought of using it to save the time and money to redo the DPR.
The Technical Department of the Nepal Army has started the process of hiring consultants to determine, if the DPR prepared by the Indian consortium is suitable for adaptation. The team will go through the report and advise the division whether it could be used.
Though the Army has said that a formal decision is yet to be made, it has no option than to buy the DPR of the expressway with the Indian company to start the construction immediately after the monsoon.
But the Indian consortium has asked the government to pay Rs 600 million for the DPR as it could not get the contract to construct the expressway.
According to the contract between the Indian consortium and the government, the government should compensate the Indian consortium for the DPR, if government scraps the agreement. "If the Army adopts the DPR, it will pay the compensation," according to the Army source.
If the Army decides not to purchase the DPR, it will have to prepare a new one, which will take quite some time delaying construction of the express way that is expected to reduce travel time – between Kathmanu and Nijgad in the south to less than an hour – and petroleum consumption also.
 The DPR had proposed building a four-lane expressway of Asian Class-1 Standard. The expressway should be 23-metre wide in the hills and 25-metre wide in the plains, it explains, adding that the expressway will also have around 100 bridges, including 35 smaller ones, and two tunnels that are 11.3-metre wide and 5.5-metre tall.
Initially – in February 2015 – the government had assigned IL&FS-led consortium to build the expressway as it was shortlisted as the potential builder of the expressway.
The consortium had agreed not to charge the cost of the DPR, if it was allowed to construct the project. It had submitted the report to the Sushil Koirala-led government in June 2015.
But the Koirala-led government did not award the contract to the Indian consortium due to congroversy on annual minimum revenue guarantee of up to Rs 15 billion a year, if the  road traffic failed to generate adequate profit.
After increased controversy, the government scrapped all the agreements with the Indian firm.
Later a high level committee formed under National Planning Commission (NPC) vice chair Dr Min Bahadur Shrestha in February suggested the government construct the expressway using its own resources but could adopt the DPR prepared by the Indian company to save time and money.
However, the government, in May, decided to hand over the project to the Nepal Army despite wide criticisism also for not involving the private sector, and involving the Army in to the business. Earlier when the Army had opened the track of the expressway, it was accused of embezzling funds.

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