KATHMANDU, August 5: The process to award contracts of 13 road projects financed by Indian Line of Credit (LoC) III will finally be held in Kathmandu.

Officials privy to the development say that India has agreed to Nepal's proposal of holding contracting process from Kathmandu. This became possible after the southern neighbor recently withdrew its proposal of awarding contracts for the road projects from New Delhi itself.

The contracting process to utilize US$ 300 million of the LoC III announced by India was delayed for at least three months after Nepal denied the Indian proposal of selecting contractors from New Delhi. 

Indian Prime Minister Narendra Modi had announced the soft loan of $ 1 billion for infrastructure projects of Nepal while addressing the Nepali parliament in August, 2014.“
"As India has agreed to our proposal, we will begin the process of pre-qualification of contractors in Kathmandu very so”n," Laxmi Dutta Bhatta, senior divisional engineer of Department of Roads (DoR), told Republica.

The Indian proposal to select contractors for the road projects from New Delhi itself had drawn criticisms from Nepali contractors and engineers. They had, among others, demanded that that 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. But the two governments have not made any decision on this demand.

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.
Government officials say that they demanded that Nepal be allowed to select contactors on its own, citing example of contracting process of Hulaki Road and Rahughat Hydropower Projects which were held in India. Both the contracts have been terminated.

Talking to Republica, FCAN General Secretary, Ram Sharan Deuja, welcomed the decision to hold contracting process in Kathmand“. "Our demands have been addressed by the government. We had argued that it would not be appropriate to carry out contracting process of infrastructure projects of Nepal in New Del”i," he added.

Baikuntha Aryal, Chief of International Economic Cooperation Coordination Division of Ministry of Finance, said that he was hopeful that the projects will now move ahead without any hurdles. 

Similarly, Rs 20 billion ($200 million) of the LoC III has been allocated for two irrigation projects - 3rd 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 currently underway in New Delhi. However, the officials fear that the Indian side put forth similar conditions while signing loan agreements for these projects.

Remaining $450 million of the Indian soft loan has remained unused.

 
• contracting
 
• process
 
• roads
 
• begin
 
• soon
 
• kathmandu