Govt scraps agreement with Indian Consortium IL&FS

Kathmandu, Nov. 20

The joint meeting of the Development Committee and Finance Committee of the Legislature-Parliament Sunday welcomed the government's decision to scrap the agreements with the Indian consortium Infrastructure Leasing and Financial Services (IL&FS) and the Detailed Project Report (DPR) it had prepared for the construction of the Kathmandu-Terai Fast Track road.

Supporting the government decision to construct the shortest motorway to connect the capital city, Kathmandu, with the southern plains and Nepal-India border on its own, the meeting directed the government to get the decision approved by the Cabinet at the earliest.

Minister for Physical Infrastructure and Transport Ramesh Lekhak had updated the lawmakers about the government's decision to cancel all agreements and dealings with the IL&FS so far and take up the construction by itself.

He said that the ministry  had forwarded the proposal to the Cabinet for approval.

The government has allocated Rs. 10 billion for the Fast Track in the budget of the current fiscal year with the aim of building the project on its own.

The project fell into controversy following lobbying by some interest groups to involve India, and IL&FS in particular, in developing the ambitious project.

The meeting also expressed concern over the sluggish progress in the construction of the international airport at Nijgadh and asked the government to manage funds required to construct the two national pride projects.

However, speaking at the meeting, Finance Minister Krishna Bahadur Mahara gave assurances that there would be no shortage of funds for the Fast Track.

The joint meeting also concluded that the work of preparing the DPR of Nijgadh International Airport by the South Korean company LMW was not transparant and clear.

It has, therefore, asked the government to review the agreement with LMW.

As per the DPR prepared by LMW, the total cost to complete the construction of the airport was put at Rs. 670 billion in 2011. The amount was about Rs. 150 billion higher than the national budget then.

"We direct the government, Office of the Prime Minister and Council of Ministers, concerned ministries, Civil Aviation Authority of Nepal and National Planning Commission to conclude the DPR of the two projects, and clarify the development model and establish the administrative mechanism for them," reads the decision issued by the Development Committee chairman Rabindra Adhikari and Finance Committee Chiarman Prakash Jwala.

They said that although the two committees of the Parliament had continuously nudged the government and other agencies to expedite the construciton process of the Fast Track and airport for the last couple of years, there had been no noticable progress.

The meeting urged the government and line agencies to be conscious of the challenges that could emerge while constructing large national pride projects like the Fast Track and Nijgadh International Airport, conducting the Environmental Impact Assessment (EIA), and acquiring land for the project.

It directed the governement to prepare a national action plan and forge better coordination among the concerned agencies and authorities in order to achieve tangible progress while developing large infrastructure projects.