Kathmandu, May 16

Investment Board Nepal (IBN) has postponed signing the memorandum of understanding (MoU) with Kathmandu Monorail Company (KMC).

Issuing a letter to KMC, the board said that the company had not fulfilled all the requirements stipulated and agreed upon in the MoU.

IBN had forwarded a letter to KMC on May 3, asking the company to fulfil the provision of depositing the performance security as stipulated in the MoU. “KMC was unable to deposit the Rs 100 million that was required as performance security so we have delayed the signing of the MoU,” said Maha Prasad Adhikari, chief executive officer of IBN.

IBN has also informed KMC that the terms and conditions of the MoU are non-negotiable.

However, KMC has said that they are not convinced with three clauses in the MoU. “We are not comfortable with the clause that KMC will have to forfeit the amount deposited as performance security if we are unable to complete the detailed project report (DPR) on schedule,” said DN Thapa, chairman of KMC.

He also mentioned KMC has reservations regarding the clause that states that the right to whether partially or fully accept the DPR lies solely with the government.

As per Thapa, KMC is also unhappy about the clause that says that if the government is not satisfied with the DPR, it can ask another company to prepare a new DPR.

KMC has plans to construct the Kathmandu Monorail Project under build, own, operate, transfer (BOOT) model.