20 development projects that will be watched in 2020

Published On: January 1, 2020 10:00 AM NPT By: Sagar Ghimire


In 2020, two national pride projects – Upper Tamakoshi Hydropower Project and Gautam Buddha International Airport project – are set to be completed. The construction of some other promising projects will kick-off. Authorities will have to expedite works for some projects amid their looming deadlines. Even the current pace of the progress of few development projects will bring them closer toward the completion. Here are 20 development projects that will be watched closely in the year 2020.​ 

1. Kathmandu-Tarai Expressway: Construction work of Kathmandu-Tarai Expressway has gained momentum after Nepal Army took over this national pride project popularly known as 'Fast Track' in April 14, 201. The 76.4 KM mega highway project will connect Nijgadh of Bara to Kathmandu. This expressway is not only of strategic interest, but also holds a potential to become a boon for the country's economic development. Estimated to cost Rs 175.19 billion, the project is scheduled to be completed in February 2024.

2. Nijgadh International Airport: In 2020, the government is likely to pick a company to develop second international airport (SIA) in Nijgadh. Tourism Minister Yogesh Bhattarai has put the project in his priority list and vowed to lay the foundation stone for the project to start construction in 2020. The Investment Board of Nepal (IBN) has already shortlisted the Zürich Airport International AG to construct the airport that will be built in three phases. With an estimated total cost of US$ 6.57 billion, this will be the biggest and the busiest airport in South Asia.  Following the completion of all three phases, the airport is projected to handle 60 million passengers annually.

3. Upper Tamakoshi Hydropower Project: If everything goes as planned, the biggest hydropower project with a capacity of 456 megawatt will come into operation in 2020. The construction cost of the run-of-the-river project developed by the government by mobilizing local funds is expected to swell to Rs 73 billion. It is of significant economic importance to Nepal because the generation of electricity will make Nepal an energy surplus country and end the energy reliance on import from India during dry season. 

4. Melamchi Water Supply Project: The much-awaited mega drinking water project is considered to be the most viable long-term alternative to ease the chronic water shortage that exists within Kathmandu Valley. After a halt of over a year after the Italian contractor abandoned the project, Sinhydro, a Chinese construction firm, was awarded the contract to complete the remaining works by mid-July 2020. The Chinese firm has reportedly assured the government to complete the project before the deadline. If the Chinese firm follows through its commitment, the government will be able to supply over 170 million liters drinking water daily to households in Kathmandu. 

5. Upper Trishuli 1: The hydropower project located in Rasuwa district will have a total installed capacity of 216 MW. International Finance Corporation (IFC), an investment arm of the World Bank Group, and a consortium of other international lenders, have agreed on $453 million debt financing package to construct the project that will increase Nepal's electricity supply by one-third from current levels. The construction of the project is going to begin in 2020 with a target of completion in 2024. Finance Minister Yuba Raj Khatiwada has termed the Upper Trishuli 1 Project a model project for foreign investment in Nepal. 

6. Huaxin Cement: This is the second largest cement manufacturing project with foreign direct investment (FDI). Huaxin Cement Narayani Pvt. Ltd, a joint Nepali-Chinese venture with the FDI amount of $140 million (equivalent to Rs 15 billion) will set up cement plants at Dhading. Through the establishment that is currently under construction, the company plans to produce 3,000 tons cement daily in the first phase with the creation of 1,000 job opportunities. The joint venture company has bagged the contract of limestone mine by paying Rs 600 million to the government through a competitive bidding process. A project investment agreement (PIA) was signed between the IBN and Huaxin Cement of China during the Prime Minister Khadga Prasad Oli's visit to China last year.

7. Sikta Irrigation Project: With estimated cost of Rs 25 billion, this will be the largest irrigation project in the country. Project officials say that over 60% works of the project has been completed and will be completed by 2020. The quality of the works of the national pride project, however, has come into question as the main canal has broken down repeatedly. Once this project is completed, 42,766 hectares of arable land will have irrigation facility. 

8. Gautam Buddha International Airport (GBIA): The project was scheduled to be completed by the end of this year. However, the project officials are seeking yet another deadline to complete the project. Now, the international airport being constructed with the financial support of the Asian Development Bank is expected to be ready for the test flight by the first quarter of 2020. The international airport is expected to serve 760,000 passengers annually by 2030, including 280,000 visitors to Lumbini which lies 20 kilometers west of the GBIA. The completion of GBIA with enable airlines to establish direct air services from countries like India, Sri Lanka, Thailand, and Myanmar, which Buddhist population is high, immediately and from China, South Korea and Japan in the medium term. 

9. Pokhara Regional International Airport: This airport which has drawn appreciation for the fast progress in the construction is likely to be completed within the next one and half years. Flight operations are planned to begin in April, 2021. Official said all the remaining works of the much-awaited regional international airport will be completed by December 2020 and flights will start soon afterwards. It is estimated that Rs 21.47 billion will be required to complete the construction works. The airport, with 45 meters wide and 2,500 meters long runway, can operate aircraft as big as Boeing 757. Construction works had started after agreements between Nepal's Ministry of Finance and China's Export-Import (EXIM) Bank for loans and Civil Aviation Authority of Nepal (CAAN) and Chinese company CMMC Engineering for construction.

10. Rani Jamara Kulariya Irrigation Project: The project going to be built with an estimated cost of Rs 27.7 billion aims to irrigate 38,300 hectares of arable land round the year.  The government has set a target to complete this project by fiscal year 2023/24. By rebuilding farmer-managed canals, develop mechanisms to protect the irrigated areas and improve the village agriculture road, the main purpose of this project is to increase the production and productivity of not only the main irrigated crops, but also vegetables and fruits, by introducing improved technologies and practices and better use of irrigation water. 

11. Bheri-Babai Diversion Multipurpose Project : Nearly 51,000 hectares of land in Bardiya and Banke districts is estimated to get irrigation facility from this multipurpose project that will also generate 48 megawatt of electricity. Tunnel boring machine was used for the first time in Nepal to construct the tunnel of this mega project. The construction of 12.2-kilometer long tunnel, a major component of the national pride project, was completed in April, a year before the deadline and within the allocated budget.  The project is expected to be completed by Fiscal Year 2022/23. The project's estimated cost is Rs 33.19 billion.

12. Pushpalal (Mid Hill) Highway: This highway is expected to serve as alternative to the existing East-West Highway that mainly runs through the tarai region. Pushpalal Highway runs through the hilly region of the country from Chiyo Bhanjyang of Panchthar district in the far-east to Jhulaghat of Baitadi district in the far-west. Nearly 10 million Nepalis will benefit upon completion of the highway, a national pride project. The 1,776 kilometer highway connects 215 settlements of 26 districts. To complete the project by the end of the fiscal year 2020/21, the government will have to intensify the construction work in 2020. The project cost is estimated to be Rs 79.18 billion.  

13. Tanahu Hydropower Project: Located in Damauli in Tanahu district, this will be medium-sized hydropower plant (140 MW) with water storage to make power supply available throughout the year and meet the country's peak demand in particular for the dry season.  The project is estimated to cost Rs 50.50 billion and expected to be completed in the next five years. Tanahu Hydropower Ltd, a subsidiary of Nepal Electricity Authority, has already signed power purchase agreement (PPA) with the NEA with a plan to bring the project into commercial operation by April 2024. The project with an estimated cost of $505 million (including transmission line, rural electrification and interest payment of construction period) is being developed with the funding of the Asian Development Bank, JICA and European Investment Bank.

14. Upper Karnali Hydropower Project: In 2019, GMR Energy, the developer of 900 MW Upper Karnali Hydropower Project (UKHP), concluded negotiations with Bangladesh over tariffs, terms and conditions of the power purchase agreement for selling 500 MW of electricity. The deal between the developer of the mega hydropower project and the government of Bangladesh marks a breakthrough in the project whose deadline for financial closure had expired last year.  An agreement that is likely to be signed in 2020 will also help in ending uncertainty over the fate of the mega hydropower project. Nepal will receive 27% free equity and 12% free energy from the Upper Karnali project. This amounts to 108 MW of electricity, approximately equal to 15% of the current installed capacity in Nepal.

15. Arun-3 Hydro Electric Project: India's SJVN Arun III Power Development Company is developing the 900 MW run-of-the-river type project on Arun River in Sankhuwasabha district. The construction of the project has gained momentum after the Prime Minister Khadga Prasad Oli and Indian Prime Minister Narendra Modi laid the foundation stone of the project remotely during Modi's Nepal visit in May last year. The project was awarded to SJVN Limited on build-own-operate-transfer (BOOT) basis for a period of 30 years. The project will provide 21.9% free electricity to Nepal. Although the project was supposed to start generating energy by 2020 as per the earlier agreement, the company has later negotiated to complete the construction of the project by 2023.

16. Nagdhunga-Naubise Tunnel Road: This tunnel project will connect Sisnekhola and Basnetchhap. The 2.7-kilometer-long double lane road is expected to reduce the time to clear Nagdhunga Pass by one-third. With construction beginning in mid-November, the construction of the project is expected to complete in 42 months. The construction of the tunnel under the Nagdhunga pass is expected to ease the current traffic congestion along the Nagdhunga-Naubise section of the Prithvi Highway. The Japanese government is providing Rs 16 billion in concessional loan for the project.

17. Budhigandaki Hydropower Project: The government has initiated construction of the 1,200 MW storage project in the Budhi Gandaki River that flows between Gorkha and Dhading districts. As of now, the government has finalized its detailed project report (DPR) and has been providing compensation to the people affected by the project construction. The government so far has distributed Rs 26 billion in compensation for land acquisition. To build the national pride project through domestic resources, the government has been collecting infrastructure development tax in the import of petroleum products.  In 2020, the land acquisition could be completed along with the government finalizing the development modality of the hydro project. 

18. Hulaki Rajmarga (Postal Highway): Hulaki Rajmarga, commonly known as Postal Highway, is a 1,792-kilometer road project important not only for east-west connectivity in Tarai, but also to build north-south road network. The project is estimated to cost Rs 25 billion. The Indian government is providing Rs 8 billion in grants to build this project. But the project has seen inordinate delay due to non-performance of contractor, among other factors. The project is expected to be completed by Fiscal Year 2020/21. Upon completion, it will connect 20 districts between Jhapa in the east and Kanchanpur in the west. The project includes 125 bridges.

19. Nepal-China Eco Industrial Park:  The industrial park located at Damak in Jhapa district is going to be built with a total investment of nearly Rs 64 billion from Chinese investor, Lhasa Economic and Technology Development Zone Jing-Ping Joint Creation Construction Project Development Co Ltd. Spread over an area of 1,600 hectares, the industrial park will be built in public-private partnership (PPP) model. The project is a part of China's ambitious Belt and Road Initiative. The industrial park will have to capacity to house 700 industries manufacturing products ranging from electrical appliances to readymade garment, automobiles, foods and agriculture products from domestic as well as multinational corporations.

20. Millennium Challenge Corporation Compact Program: The government is preparing to implement several road maintenance and transmission line projects under the Millennium Challenge Corporation (MCC) Compact Grant of the US government worth US$ 500 million. The MCC grant will support construction of 312-kilometer 400 KV transmission lines in Lapsiphedi-Galchhi-Damauli-Sunawal Corridor as well as three substations. It will also support maintenance of over 99 kilometers of roads in various segments of the East-West highways. The US support is aimed at improving regional connectivity, spurring private investment, driving growth and reducing poverty.


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