Kathmandu, December 20

The government of Japan will provide loan assistance worth $141.41 million (approximately Rs 15.30 billion) to Nepal to construct the Nagdhunga to Naubise 2.35-km tunnel road project.

Ambassador of Japan to Nepal Masashi Ogawa, as a representative of the government of Japan, will sign the loan agreement with Ministry of Finance on Thursday. The loan is being granted at 0.001 per cent interest rate with a payback period of 40 years and has a possible grace period of additional 10 years.

The estimated project cost is around 22.14 billion yen (approximately $188.19 million), of which 16.63 billion yen ($141.41 million) is covered by official development assistance loan.

In what is slated to be the first tunnel road project in the country, it will be developed using cutting-edge technology from Japan, according to Japanese Ambassador Ogawa.

At present, the Nagdhunga-Naubise section of the Tribhuvan Highway is highly congested because Nagdhunga is the main entry and exit point of the Valley. The tunnel road project will shorten the 14-km distance of the section to 2.35 km after completion.

The detailed project report (DPR) of the project is expected to be completed within one-and-a-half years and the construction within three-and-a-half years, according to Jun Sakuma, chief representative of Japan International Cooperation Agency (JICA) Nepal Office. “The three-lane tunnel road project is expected to be completed by August 2022.”

The contractor of the project will be selected under the principle of international competitive bidding (ICB). Initial study of Nagdhunga-Naubise tunnel road project was carried out in 2013, and data collection survey and preparatory survey was carried out in 2015.

The tunnel road project will be executed by the Ministry of Physical Infrastructure and Transport and implemented by the Department of Roads (DoR) and Roads Board Nepal will operate the road, which will also fix the toll for the vehicles.