Nepal | May 30, 2020

Who will build Kathmandu Monorail Project?

Umesh Poudel
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Kathmandu, June 26

In a country where negligence of contractors is often blamed for project delays, Kathmandu Monorail Project has come across a problem of a different sort — who will build it?

In December 2016, the Investment Board Nepal had announced that Kathmandu Monorail Company Pvt Ltd had been granted permission for a pre-feasibility study and detailed feasibility study of the 28.55-kilometre monorail project.

However, as the IBN and KMCPL haggled over some of the conditions set in the draft memorandum of understanding to conduct detailed project report, the Kathmandu Metropolitan City inked an agreement with China Railway Construction Corporation Ltd last month for conducting a feasibility study of the project.

Interestingly, KMCPL has already finished the pre-feasibility study and detailed feasibility study of the monorail project that will be aligned with Kathmandu Valley’s Ring Road.

The KMCPL and IBN had failed to sign the MoU on May 16 as scheduled after the company expressed strong reservations against the requirement to deposit Rs 100 million as ‘performance guarantee’. Subsequently, KMCPL had filed a case against the Office of the Prime Minister and Council of Ministers and IBN on May 28 and a single bench of Justice Bam Kumar Shrestha had issued an interim order in the case.

Meanwhile, KMC signed the agreement with CRCCL on May 26. “As we came to know that KMCPL had failed to deposit the required ‘performance guarantee’, which hinted at its inability to implement the project, we signed an agreement with CRCCL,” said Mahesh Kafle, head of Public Private Partnership unit of KMC.

According to Kafle, KMC had been holding regular discussions with IBN and they had agreed beforehand to ink a deal with CRCCL if the agreement with KMCPL did not go through. He also alleged that IBN had hand-picked KMCPL for the project without abiding by the public procurement rules, which would make the agreement with the company null and void any way.

Uttam Bhakta Wagle, spokesperson for IBN, refuted Kafle’s claims. “We have not had any communication with KMC regarding the monorail project.”

Wagle added that while KMC may have the authority to conduct feasibility study for the project as per the new federal system, it does not have the right to seal a deal to implement such a mega project without getting consent from IBN.

The law requires any project worth over Rs 10 billion to be routed through IBN. The cost of building the monorail is expected to hover between Rs 70 billion and Rs 80 billion.

Meanwhile, the Supreme Court yesterday extended an interim order barring the IBN from implementing its decision to seek Rs 100 million as performance guarantee from KMCPL.

“There is more than what meets the eye in this project, otherwise how can two government entities decide to ink separate agreements to build the same project?” questioned DN Thapa, chairman of KMCPL, adding his company would abide by the final decision of the apex court, which is expected in the next few weeks.

Meanwhile, HariPrabhaKhadgiShrestha, deputy mayor of KMC, claimed she was kept in the dark about the agreement signing with the Chinese firm till the very last minute. “I don’t know anything about this project or how KMC got involved.”

Despite repeated attempts, THT was unable to contact KMC Mayor Bidhya Sundar Shakya to get his views on the contract issue of the much-hyped project.


A version of this article appears in print on June 27, 2018 of The Himalayan Times.


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