The government has reduced the budget for the Kathmandu-Tarai expressway project by half while also announcing that the multi-billion rupee highway would be completed in three years.

The national budget presented in the federal parliament on Thursday has allocated Rs 8.93 billion for the first of its kind highway in Nepal. The government had consecutively allocated Rs 15 billion to the project in the previous two fiscal years.
The Nepal Army, which is developing the project, had sought around Rs 13.5 billion for the 72.5 km fast track.

The detailed project report, endorsed by the Cabinet in August last year, has put the estimated project cost at Rs 175 billion, which could increase to Rs213 billion in case of contingencies.

Hardly around Rs 16 billion (9 percent of the total budget) has been spent since the project began in 2017.

“The budget is lower than what we had expected. We will have to revise our implementation plan accordingly,” Brigadier General Sharad Lal Shrestha, chief of the project, told the Post.

The government will have to allocate Rs 150 billion in the next two fiscal years to complete the project in time.
The officials at the Ministry of Defence say the Covid-19 pandemic is the reason behind inadequate allocation to the national pride project.

They also fear that budget crunch could affect the project’s completion deadline.

“There is a possible scenario of the project not completing in the next three years,” Santa Bahadur Sunar, spokesperson at the ministry told the Post.

The project, originally said to be completed by August 2021, has received the deadline extension to June 2024.
An official at the Defence Ministry said the inability of the Army to spend the allocated budget in the previous two fiscal years afforded the Finance Ministry the excuse to reduce the project’s budget.

In the previous two fiscal years, the Army had surrendered Rs 7 billion and Rs 9 billion to the state coffer after failing to spend the allocated funds.

The Army has said that the delay in appointment of an international consultant due to the hold-up caused by the government by not endorsing the detailed project report in time is the reason behind its inability to spend the budget.

The controversy regarding the selection process of a consultant earlier last year had also affected the project.

The Army had selected six international firms—five Chinese and one Turkish—to provide consultative service for the project, but the process was scrapped after a probe found that the selection criteria were leaked.

An internal probe launched by the Army concluded the incident was a result of technical error and reprimanded the project chief, Shrestha.

The Army has selected Korea-based Yooshin Engineering as consultant for the project. In a virtual press meet last week, Shrestha had said the project had entered a new phase after the appointment of the international consultant.