Railway study pacts delayed over dollar guarantee

KATHMANDU, Dec 22: An agreement between the Nepal government and the South Korean firm Chungsuk Engineering Company (CEC) on conducting a Detail Project Report (DPR) for a portion of the proposed East-West Electrical Railway and a preliminary study of the proposed Kathmandu Metro has been delayed as the Ministry of Finance (MoF) has taken a lot of time to give an assurance of payment of the consulting fee to the firm in US dollars.



After approaching MoF for a guarantee of payment in dollars, the Ministry of Physical Planning and Works (MoPPW) a couple of weeks back issued a letter of intent -- a formal notification of award of contract- to CEC, requesting preparation of a formal agreement with the government soon for the proposed projects.[break]



The letter of intent was issued to the consulting firm by MoPPW -- the implementing ministry -- to prepare the DPR for construction of the 136-km Bardibas-Birgunj section of the proposed Mechi-Mahakali Electrical Railway system and the Kathmandu Metro, a mass rapid transport (underground and elevated) rail system in the capital.



“We are waiting for consent from MoF guaranteeing payment of the consulting fee to the Korean firm in US dollars. We will immediately fix the date for the formal signing of the pact with the company once MoF gives its nod in this regard,” said Ram Kumar Lamsal, director general of the Department of Railway (DoR).



According to Lamsal, around Rs 400 million (about $5 million) needs to be paid to the firm for completing the DPR for the Bardibas-Birgunj electric railway system ($4 million) and the feasibility study for the Kathmandu Metro ($1 million).



Lamsal said delay in giving consent in this regard has prolonged the process of inking the pact with CEC for the railway study projects.



Lamal said the agreement would include date of completion, mode of payment, number of stations and bridges to be covered by the railway line, and the dispute settlement process, among other things.



Meanwhile, MoF has already given its consent to the proposal from MoPPW to conduct the DPR of the 256-km Simara-Butwal section of the East-West Electrical Railway. MoPPW has called for expression of interest from consulting firms for the DPR of that section.



Similarly, MoPPW has also proposed a DPR for the 406 km Butwal-Mahendranagar section of the electric rail line. Lamsal said the costs for the DPRs for the Simara-Butwal section and Butwal-Mahendranagar section are estimated at Rs 500 million and Rs 900 million respectively.

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