Two of the shortlisted companies -- Larsen & Toubro (L&T) and Infrastructure Leasing & Financial Services (IL&FS) - were expected to submit RFP to develop the national pride project by Sunday. “But both of them failed to submit RFP documents within the extended period of four months,” Ananta Acharya, chief of Kathmandu Tarai Fast Track Project, told Republica.[break]
The project office had shortlisted three Indian firms after assessment of the expression of interest of some nine firms in December 2012. It had then asked the shortlisted firms to submit RFP within four months on January 21.
The third shortlisted company -- Reliance Infrastructure - has not responded to the project ever since it was shortlisted.
The deadline for submission of RFP has been extended by two times so far upon the request of the two shortlisted firms. Both the firms had sought deadline extension, saying that they need to conduct further study after the government awarded the license to develop Kathmandu-Hetauda Tunnel Highway to a local company.
The proposed four-lane expressway of 76 km aims to connect Kathmandu with Nijgadh where the government plans to build a second international airport.
The government plans to award the project, which is estimated to cost Rs 76 billion, under Built Operate Own and Transfer (BOOT) model.
Tulsi Sitaula, secretary at the Ministry of Physical Infrastructure and Transport, said the government´s efforts over the past three years to bring Foreign Direct Investment in the national priority project have failed. “Now, a steering committee of the project led by the Minister for Physical Infrastructure and Transport will decide on ways to develop the project soon,” added Sitaula.
Sitaula said the government should develop the project through its resources by customizing the expressway to two-lane. He said the government can develop the project by allocating Rs 5 billion annually from its regular budget earmarked for the infrastructure sector.
Critics, however, say foreign direct investment is not coming in big infrastructure projects because of the government short-sightedness. They said the government discouraged foreign investors by awarding the license to develop tunnel highway to a domestic developer. Experts say the tunnel highway goes parallel with the fast track and directly affects traffic on the latter.
“We, however, have told the shortlisted firms to include all their concerns in the RFP,” added Sitaula. “We have promised them that the government will address their concerns by sharing risks and even extending the time period of BOOT model up to by five years.”
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