A team formed by the Ministry of Physical Planning and Infrastructure Development to recommend on the modailty of the project’s development suggested that the Nepali Armt be given priority when selecting a developer.
The ministry, which received the recommendation few days ago, has written to the Ministry of Defence to seek its opinion on the issue.
According to the recommendation prepared by the team, the government shall mobilise funds for the project and the army shall use its resources to manage and develop the project. Minister for Infrastructure Ramesh Lekhak also admitted that his ministry was look at the option of handing over the project to the army, which was also deployed to open the highway’s track.
In March 2015, Nepal’s government had assigned a consortium of Indian companies (Infrastructure Leasing and Financial Services (IL&FS) Transportation Networks, IL&FS Engineering and Construction, and Suryavir Infrastructure Construction) to prepare the DPR of the project. The consortium had agreed to prepare the DPR for free if it was allowed to develop the project.
The consortium submitted the DPR in four months and the then Sushil Koirala-led government started preparations to award the project to the consortium. But Koirala government landed in controversy after it agreed to provide an annual minimum revenue guarantee of $150 million to the project developers.
The government’s plan to acquire a fresh line of concessional credit worth over $750 million from India to support the project also raised eyebrows. When the issue reached the Supreme Court, it issued an interim order against the decision to award the project to the Indian developers.
In December last year, the government decided to cancel all agreements with the Indian consortium and to use domestic resources to build the strategically-important road.
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