Government shortlists contractors for three ambitious projects, including Nijgadh airportInvestment Board of Nepal has roped in an Indian-Japanese joint venture, a Chinese and a Swiss company to submit proposals for the projects.
The government on Monday shortlisted contractors for the construction of three mega projects—Lower Arun Hydropower Project, Nijgadh International Airport and Kathmandu Outer Ring Road Project—in a move that could give impetus to Nepal’s much-needed infrastructure.
A meeting of the Investment Board of Nepal, chaired by Prime Minister KP Sharma Oli, shortlisted the contractors for the three projects, which were among those showcased at the Nepal Investment Summit held in March.
Maha Prasad Adhikari, chief executive officer of the board, said a committee formed to evaluate the expressions of interest shortlisted the companies for the projects.
Monday’s meeting shortlisted Satluj Jal Vidyut Nigam Limited, India and Electric Power Development Company (J-Power) Nepal, a Japanese company, to work in collaboration with Green Resources Private Limited for the construction of Lower Arun Hydropower Project that has the capacity to generate 400 megawatts of energy.
The hydropower project has been in limbo since 2016, when the government revoked the licence of a Brazilian company, Brass Power. The government had issued the licence to the Brazilian company in 2012. The Brazilian company had even planned to export more than 50 percent of the energy generated to India. Brass Power did not show interest in developing the project after there was no progress in the power purchase agreement with India.
After revoking the licence to the Brazilian company, the government had kept the project in its basket and was looking for a builder.
Similarly, the board’s meeting has also called in the joint venture of Power Construction Corporation of China and Hydroelectricity Investment Development Company Limited.
Power Construction Corporation of China is the state-owned entity of the Chinese government while Hydroelectricity Investment Development Company Limited is the entity of the Government of Nepal.
Lower Arun Hydropower project, located in Sankhuwasabha and Bhojpur districts, is the second-largest hydropower project that the government had showcased during the investment summit. The project’s estimated cost, based on a Department of Electricity Development report prepared in 2017, is $1.3 billion.
Likewise, the government has shortlisted Zurich Airport International AG as a single company to work in a public-private partnership model for the construction of the country’s third international airport.
The board had received letters of intent from eight companies from seven countries, including Nepal, for the construction of the $3.45 billion Nijgadh International Airport in Bara. The airport, about 175km from the Capital, is expected to serve as an alternative to congestion and winter fog at Kathmandu’s Tribhuvan International Airport, the country’s sole aerial gateway.
The government had decided to develop Nijgadh International Airport, one of the most ambitious projects, in 1995. The timeline for the new airport was pushed back on multiple occasions amid concerns about financing and legal issues over its environmental impact.
The Environmental Impact Assessment report approved by the government shows that more than 2.4 million small and large trees will have to be cut down to build the long-awaited modern international airport in Nijgadh that will have a 4,000-metre runway.
Similarly, the government has shortlisted China Communication Construction Company to construct the Kathmandu Outer Ring Road Project. The government has estimated Rs150 billion for the four-lane 72-km Outer Ring Road Project.
The project was initially proposed 14 years ago through the budget for 2005/06. The initial cost estimate for the project stood at Rs6 billion.
According to the board, the shortlisted companies now have to submit proposals to construct the projects.
“To assess the proposals, the board has formed a separate committee that includes ministers and high-level officials from the concerned ministries,” said Adhikari. “The committee will evaluate several criteria, including companies’ history and the possible timeline before letting them take the construction forward.”
According to the IBN, the contractor selected for the construction of Lower Arun Hydropower Project will get 30 days to forward its proposal from the date the board asks it to do so.
Adhikari said the board would take around 31 days to forward a request for proposal to the selected contractor.
Similarly, the board will be providing a deadline of 40 days for proposal submissions for Nijgadh International Airport and Kathmandu Outer Ring Road Project.
According to the World Bank, Nepal needs infrastructure investments of 10 to 15 percent of the gross domestic product annually for the next 10 years. As part of its bid to boost investments, the government earlier this year had organised Nepal Investment Summit, which saw investment proposals worth about$17.5 billion from both domestic and foreign investors.
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