IL&FS claims Rs 2.37bn compensation for DPR

Kathmandu, June 24

The Indian firm that was involved in preparing the detailed project report (DPR) of the Kathmandu-Tarai expressway has sought compensation from the government. Infrastructure Leasing & Financial Services (IL&FS) which had prepared the DPR of the fast track has sought Rs 2.37 billion as compensation.

“The concerned company has sought a huge amount of money as compensation for preparing DPR of Kathmandu-Tarai expressway,” informed Rajendra Raj Sharma, spokesperson for Ministry of Physical Infrastructure and Transport (MoPIT).

IL&FS had forwarded a letter to MoPIT on May 6 seeking compensation for the DPR as the government has decided not to use it. “The initial agreement was that if IL&FS was awarded the contract to build the fast track then the company would not charge any amount for the DPR,” said Sharma, adding that now since the government has decided to award the contract to build the expressway to Nepal Army, IL&FS has sought compensation.

The IL&FS had completed the DPR of the 76.2-kilometre-long project in 2015.

Earlier, MoPIT had formed a joint secretary-level committee to study whether it would be feasible to disburse the compensation being sought by the Indian company. The committee had strictly recommended the government not to pay the compensation amount sought by IL&FS.

“The committee had submitted its study to Minister for Physical Infrastructure and Transport, Raghubir Mahaseth, recommending the ministry not to pay the amount demanded for the DPR,” Sharma stated.

The committee had suggested that the actual price of the DPR should not exceed Rs 200 million. “We have held numerous meetings with IL&FS and said that we are ready to pay only Rs 200 million for the DPR but they are seeking Rs 2.37 billion,” informed Sharma.

Meanwhile, the Nepal Army has already started the process of preparing the DPR of the Kathmandu-Tarai expressway, which is a national pride project. It published a notice on March 28 seeking expression of interest (EoI) from eligible firms to prepare the DPR and a total of 17 firms including a domestic company submitted their EoIs.

From among the firms that had shown interest to prepare DPR, Nepal Army shortlisted six international bidders on June 15. The six shortlisted companies are AF-Group c/o AF Consult Switzerland; a joint venture of Yooshin and Pyunghwa of Korea; Louis Berger Consulting Pvt Ltd of India; Meinhardt Hong Kong of China; SMEC International Pvt Ltd of Japan and Soosung Engineering Co of China.

The technical evaluation process of the bids submitted by the six firms has also started. “We have also sought financial proposals from the shortlisted companies and once we have gone through both the technical and financial proposals we will select the best candidate,” informed Brigadier General of Nepal Army, Gokul Bhandari. He further added that they have a target to complete the DPR within the next six months.

The project is expected to be completed four years after completion of the DPR.