KATHMANDU, Oct 5: The government has started contract process for projects to be developed by utilizing Line of Credit III announced by India in 2014.

The process is finally taking off after the southern neighbor withdrew its proposal of carrying out contract process from New Delhi itself. The process was halted for at least six months after Nepal denied the Indian proposal.

To begin with, the government is beginning contract process for road projects worth Rs 35 billion. It is utilizing another Rs 20 billion from the soft loan for irrigation projects. 
India had announced Line of Credit III worth Rs 100 billion during Nepal visit of its Prime Minister Narendra Modi in August, 2014. 

The first notice for prequalification applications for four of the 18 road projects was published in The Rising Nepal daily on September 18. The projects included in the notice are for upgrading/improvement of Bhedetar-Rabi-Ranke Road, Lamosanghu-Tamakoshi-Jiri Road, Shelleghat-Ramechhap-Sangutar Road and Gaidakot-Rampur-Pipaldanda Road. 

Another notice was published in two phases on September 26, while two more notices seeking prequalification applications from qualified contractors will be published next week, according to Laxmi Dutta Bhatta, senior divisional engineer of Road Improvement and Development Project under the Department of Roads (DoR).

According to the notice, Indian contractors or joint ventures between Indian and Nepali contractors can apply for the contract. However, Indian contractors must have at least 51 percent stake in such joint ventures.

Bhatta expects the contract process to complete within the current fiscal year and construction to begin from 2018/19. “Qualified firms can apply for prequalification round within 45 days of the publication of notice. The next notice for submitting request for proposal and final contract signing may take around six months,” he added.

The Indian proposal to select contractors from New Delhi itself had drawn criticisms from Nepali contractors and engineers. They had, among others, demanded that the government hold contracting process in Kathmandu.

Earlier in June, Federation of Contractors’ Association Nepal (FCAN), Society of Consulting Architectural and Engineering (SCAEF) and Nepal Engineers Association (NEA) had jointly issued a press statement, demanding that the government select contractors for the roads projects on its own. They had also submitted a memorandum to the Ministry of Physical Infrastructure and Transport, drawing the ministry’s attention toward their demands.

The three organizations had also demanded that the two governments allow contractors to use Nepali construction materials in the road projects. According to conditions of the LoC, Nepali contractors can bid the contracts of these projects worth about Rs 35 billion by forming joint ventures with Indian contractors.

Officials of the Government of Nepal had demanded that the Government of India allow Nepal to select contactors on its own, citing example of the contracting process of Hulaki Road and Rahughat Hydropower projects which were held in India. Both the projects became sick and their contracts were terminated later on.

In its press statement, FCAN had argued that it would not be appropriate to carry out contracting process of infrastructure projects of Nepal from New Delhi. 

The government has allocated Rs 20 billion (around $200 million) of the LoC III for two irrigation projects -- third phase of Mahakali Irrigation Project of Rs 16.5 billion and upgradation of Koshi Pump Canal Lift Irrigation Project of Rs 3.5 billion. 

Officials of the Ministry of Irrigation said that the process to review Detailed Project Report (DPR) of both the projects is underway.

 
• #government
 
• #contractprocess
 
• #lineofcredit3