Nepal | March 30, 2020

PDC drags feet in procuring DPR of KTM-Tarai Expressway

Sabin Mishra

Kathmandu, November 21

It has already been 40 days since the government decided to purchase the detailed project report (DPR) of Kathmandu-Tarai Expressway Project from Infrastructure Leasing & Financial Services (IL&FS) — an Indian company — which had prepared the DPR of the mega project. However, the Project Directorate Committee (PDC) — the authorised government body responsible to implement the project — has not yet begun negotiations with the Indian firm.

A high-level source at the PDC informed that not a single meeting of the committee has been called in the last one month to discuss the issues related to the negotiations with IL&FS.

“No progress has been made in the last one month as not a single meeting of the committee has been called till date,” the source said, seeking anonymity. The directorate committee has been authorised to negotiate and finalise the price of DPR with IL&FS.

However, Nepali Army, which is leading the PDC, has defended itself by saying that the directorate committee is studying the documents related to the project. “The PDC has not made any decision regarding the purchase of the DPR from the Indian firm,” said Nainraj Dahal, spokesperson for Nepali Army.

A Cabinet meeting held on October 13 had directed the Project Directorate Committee led by Lieutenant General of Nepali Army Purna Chandra Thapa to hold discussions with IL&FS and finalise the deal.

The Ministry of Defence (MoD) had sent a proposal related to the purchase of the DPR from IL&FS to the Cabinet on October 11. As per the MoD proposal, the PDC will have to recommend the amount to be paid to IL&FC for the DPR.

The Cabinet meeting had also authorised the directorate committee to revise the DPR, if needed. The PDC can purchase the DPR from the Indian company according to the ‘procurement on special circumstances’ rule — a special provision of the Public Procurement Act.

IL&FS had submitted the DPR of the expressway to the government in July, 2015. The DPR has estimated the total cost of the project to hover around Rs 100 billion.

As per the government’s decision, the army will carry out all the managerial work of the expressway and the government will provide the necessary budget. The expressway will be constructed as per the Asian Highway Standards. A total of 99 bridges and a 1.35-km tunnel have been included in the project.

The government led by CPN-UML Chairman KP Sharma Oli had decided to construct the project itself and allocated Rs 10 billion for the purpose in the annual budget of fiscal 2016-17. This has been given continuity in the budget of the current fiscal too.

The subsequent government led by CPN-Maoist Centre Chair Pushpa Kamal Dahal had decided to hand over the project to Nepali Army on May 4 and the Ministry of Physical Infrastructure and Transport had handed the project over to the Nepali Army on August 11.

The government has given the Nepali Army four years to complete the project. Around eight months of the stipulated timeframe has already elapsed without any progress.

Earlier, the government had selected IL&FS to implement the project as per the provision of Build, Own, Operate and Transfer Act. As per the act, if the consultant company gets the entire authority of the project, the cost of DPR will be adjusted in the project cost. However, in case the consultant that prepared the DPR does not get the authority to construct the project, the government needs to pay for the cost incurred while preparing the DPR.

Likewise, a study team formed by the government, coordinated by the then vice-chairman of National Planning Commission Min Bahadur Shrestha, had also recommended that the government purchase the DPR from IL&FS. The study panel had also recommended allocation in the annual budget for the project and said it could be completed within three to five years with domestic resources.


A version of this article appears in print on November 22, 2017 of The Himalayan Times.


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