Fast Track Running Slow

The development of the much-talked about Kathmandu-Tarai Fast Track road project - the expressway to connect the country’s capital to southern plains - is in limbo. More than five months have passed since the government decided to hand over the construction of the 76-km long expressway to the Nepal Army as the project developer but there has not been a major development after the decision. When the government, through a Cabinet meeting, decided to award the responsibility to Nepal Army in May, many eyebrows were raised regarding the army’s ability to execute the project given the army’s lack of experience to build roads of such magnitude. The delay in construction is now justifying such concerns. Originally, the Indian consortium consisting of Infrastructure Leasing and Financial Services (IL&FS) Transportation Networks, IL&FS Engineering and Construction and Suryavir Infrastructure Construction were hired to develop the expressway under build, own, operate and transfer (BOOT) model through global tender. The BOOT is a public-private partnership (PPP) project model in which the government contracts out a private organisation to build a large development project, own and operate it and transfers the ownership to the government after certain period as mentioned in the contract. However the government scrapped the deal after there was controversy regarding the cost of construction and minimum guarantee sought by the developer from the government. As per the DPR prepared by the Indian company, the estimated cost of the project is Rs 130 billion, significantly higher than Asian Development Bank’s estimation of Rs 95 billion. The government’s decision to award the project to Indian developer drew further criticism after the developer sought minimum revenue guarantee of Rs 15 billion annually. In other words, if the project developer fails to collect Rs 15 billion annually as toll fee from vehicles plying on the expressway, the government was to compensate the Indian firm. Those criticising the government decision to award the project to Indian developers effectively argued that the minimum revenue guarantee model would compromise Nepal’s national interest by allowing an Indian investor to make profit at the expense of the taxpayers’ money. Instead they argued that the expressway should be built through domestic financing. These arguments were raised before the Supreme Court of Nepal in the form of a public interest writ. The apex court issued an interim order in October 2015 against awarding the project to the Indian consortium. Subsequently, the KP Sharma Oli administration made a fresh decision to build the project by mobilising the government’s own resources. The Pushpa Kamal Dahal led government gave continuity to the plan. A Cabinet decision in December to terminate past agreements and decisions cleared all obstacles for the government to build the project on its own. On May 4, the government formally handed over the project’s responsibility to the Nepal Army, putting an end to all political controversy. It has been given four years to complete the project. However, the question is can the Army with zero experience in building superhighways successfully execute such an ambitious project. According to experts, the government decision to award the project to the Army might not be wise, given the importance of the project. “This project if executed on time could be a game changer for Nepal,” said an official at the Ministry of Physical Infrastructure and Transport. “Therefore, the government should have either persisted with the Indian developer or should have roped in Department of Roads with better expertise than the Army.” The government’s argument behind its decision to award the project to Nepal Army is to execute it without cost and time overrun. Almost every infrastructure project developed by state owned agencies has met cost and time overrun. Hence, it is argued that the sudden decision to award the project to the Army was to prevent such delay. However, others opine that the government’s decision was to fulfill the Army’s wish to get involved in large infrastructure development. Infrastructure Expert Surya Raj Acharya believes the government should have used Department of Roads to build the project rather than the Army. “Given the cost of development and standard of the project, Department of Roads would have been better alternative as the project developer,” he shares. “I think government chose Nepal Army so that the project development is not affected by political instability and the construction is completed on time. But, six months have passed without any significant development, casting enough doubt about the Army’s ability to complete the job on time.” The proposed Kathmandu-Tarai expressway will vastly improve connectivity and enhance the efficiency and safety of road transport between the capital and the southern plains. It will cut journey time from more than five hours to an hour. The expressway will serve as a key national highway system, helping to promote trade and development in landlocked Nepal. The four-lane expressway will even act as a transit point linking China and India. That’s why the project is deemed to be of strategic importance. The project is expected to create huge fuel savings as it will slash travel distance by nearly 160 kms. There are no exact calculations, but officials of the Department of Roads estimate that fuel savings will amount to Rs 16 billion annually, based on 2016 traffic figures. Moreover, the expressway will provide a faster transit to support another key project, a modern international airport in Nijgadh, which is expected to be the biggest airport in South Asia in terms of area. Currently, the Army is negotiating with an Indian firm to purchase the DPR of the project. A Cabinet meet in mid-October authorised the six-member committee under the leadership of lieutenant general of Nepal Army to negotiate and purchase DPR. The panel, consisting of representatives from the Nepal Army, Defence Ministry, Physical Infrastructure and Transport Ministry, National Planning Commission and Finance Ministry, has already been studying the DPR. “We have started negotiations with the Indian consortium. They have quoted a price and we are trying to bring it down,” said a source at Nepal Army who wouldn’t share the figure quoted by the Indian firm. After acquiring the DPR from the Indian consortium, the army will decide the modality under which it will develop the expressway. It has indicated that it will call for global tenders to hire a contractor and a consultant for the construction of the highway. “As soon as we acquire the DPR of the project, we seek help of the consultant to prepare detail drawing of the highway on the basis of which the construction of the expressway will be carried out,” said the army source. The army is even considering appointing international contractors to take over special project component works like tunnel and large bridges. Speaking at the meeting of the Parliamentary Development Committee in September, Major General Yogendra Bahadur Khand of the Nepal Army and Project Chief of the expressway said that they would call for global bids to appoint international contractors and consultants to look after special components separately. The army has started mobilising its workforce by placing basecamps at various locations within the expressway. “We are planning to set up camps at 10 different locations within the expressway to implement the project,” said the source. If the construction of the expressway is completed on time, it will be an engineering achievement. But, if it doesn’t, it will become one more case of lost opportunity.

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Salient Features of the Expressway

• There will be 99 bridges of total length of 9.06 km on the fast track.
• There will be 99 bridges of total length of 9.06 km on the fast track.
• This will be developed as Asian Highway ‘primary class’. Primary class refers to access-controlled motorways used exclusively by automobiles where pedestrians and bicycles will not be allowed to ensure the safety and speed of the automobile.
• The expressway will be 25 metres wide in the plains and 23 metres wide in the hills.
• The designed minimum speed is 65 kms per hour and the maximum speed is 120 kms per hour.
• There will be a 1.35-km long tunnel- Outside the tunnel, the highway will feature telecommunication systems at intervals of 2 kms to provide information about accidents and monitor traffic.
• The expressway will have provisions such as fire controlling mechanism, medical support post, ambulance, traffic support post, crane and diversions or alternative points in the tunnel.