Indian consortium seeks Rs 600 million compensation
January 31, 2017 12:50 AM NPT
KATHMANDU, Jan 31: An Indian consortium led by Infrastructure Leasing and Financial Services (IL&FS) has demanded that the government provide it Rs 600 million for the detailed project report (DPR) that it prepared for the Kathmandu-Tarai Fast Track Project.
The government had awarded the contract to develop the project in build own operate and transfer (BOOT) to the consortium. But the government had later terminated the contract, stating that it would develop the project itself.
Multiple sources at the Ministry of Physical Infrastructure and Transport confirmed that the contractor has filed a claim for Rs 600 million.
The contract process was put on hold by an interim order of the Supreme Court. Later, the government KP Sharma Oli announced to build the 76-kilometer expressway utilizing domestic sources. It had even allocated Rs 10 billion for the project - the highest allocation ever for a single project.
The cabinet meeting held on December 22 approved the contract process and also formed a study committee under Vice Chairman of National Planning Commission Min Bahadur Shrestha. The committee has also been given a mandate to study the DPR prepared by the Indian consortium and accept it if it is useful for project implementation.
Senior government officials, however, argue that government cannot pay for the DPR as there is no such provision in Private Financing in Build and Operate of Infrastructures Act, which governs all PPP projects.
The committee has also been asked to explore project development and procurement modality as well as financing avenues to develop the multi-billion-rupees project.
NPC Member Hirendra Man Pradhan, who is also a member of the committee, told Republica that the project could be developed sooner if the DPR prepared by the Indian consortium is of use“ "We, however, should negotiate with the consortium if we are to pay it DPR preparation cos”," he added.
The contract process had received criticism from all quarters because of high project costs, toll rates and the consortium's influence in the negotiation process.
Study Committee seeks term extension
A committee formed to study DPR of Kathmandu-Tarai Fast Track Road Project as well as its development and procurement modality is seeking two more weeks to complete its work.
The committee's one-month deadline expired on January 21.“
"Our study is in the final leg. As we are currently preparing report, we will propose the cabinet to extend our term by two wee”s," Hirendra Man Pradhan, member of National Planning Commission and a member of the study committee, said.
The committee has already visited project site, organized several meetings and has also reviewed the DPR prepared by IL & FS, according to Pradhan.