IBN to form body to study Valley metro railThe first meeting of Investment Board Nepal (IBN) held after the formation of the new government concluded on Sunday, adopting decisions to form a body to conduct feasibility study for a metro rail service in the Kathmandu Valley
The first meeting of Investment Board Nepal (IBN) held after the formation of the new government concluded on Sunday, adopting decisions to form a body to conduct feasibility study for a metro rail service in the Kathmandu Valley, defer pre-negotiations fee payment for the waste management project, and extend financial closure deadline for two hydroelectric projects.
A high-level committee to be formed under the leadership of a National Planning Commission (NPC) member will study “viability gap funding” to develop the metro rail under public-private partnership model.
The committee will include representatives from IBN, Ministry of Physical Infrastructure and Transport, Department of Railways, and will be asked to submit the report to IBN within three months. “Viability gap funding” means a one-time grant to support infrastructure projects that are economically justified but fall short in financial viability.
“The 25th meeting of the board also decided to defer pre-negotiations fee payment for companies that are in the process of signing project development agreement (PDA) with IBN for the development of the Kathmandu Valley Integrated Solid Waste Management Project,” read a statement issued by IBN.
IBN had been struggling to hold negotiations with Nepwaste Private Limited and Clean Valley Company Private Limited as both the companies refused to pay the fee before the PDA negotiation as per the IBN Regulations.
According to the regulations, investors have to pay pre-negotiations and agreement execution fee worth Rs100,000, or 0.2 percent of the project cost, whichever is higher. However, investors have complained levying such a fee is irrational because the signing of PDA doesn’t guarantee the project will enter the development phase.
Sunday’s meeting also decided to take a proposal to the Cabinet seeking its nod to waive the fee.
Likewise, the meeting extended financial closure deadline for two hydroelectric projects—900MW Upper Karnali and 900MW Arun III. The deadline for Upper Karnali has been extended to 18th September 18, 2017, while Arun III has got until September 30, 2017, to conclude financial closure.
Developers of both the projects had filed applications at the board seeking extension to the deadline to complete financial closure after they failed to arrange investment to build the projects.
The meeting also directed the IBN management to immediately seek action plans from both the developers, stating “how will they arrange funds”.
The meeting directed the Ministry of Forests and Soil Conservation to provide forest land required for project development to both the developers within two months.
It also directed the Energy Ministry to work jointly with IBN and prepare a modality for the development of 650MW Tamakoshi - 3 Hydroelectric Project.