MoU on project management consultancy for road works signed
KATHMANDU, Sept 17: Nepal and India on Friday signed an agreement for a line of credit (LoC) of US$ 750 million for post-earthquake reconstruction in Nepal.
"We have today signed the agreement for a line of credit of US$ 750 million for post-earthquake reconstruction of Nepal," Indian Prime Minister Modi said in a speech at Hyderabad House, in New Delhi, according to the Press Information Bureau at the office of the Indian prime minister. "I am confident that it would bring relief to millions of people affected by last year's devastating earthquake in Nepal," he added.
India has also agreed to extend additional LoC for new projects such as Phase-2 of the Terai Roads, power transmission lines, substations and a polytechnic in Kaski, Modi said, adding that India's initiatives for open skies, cross-border power trade, transit routes and cross-border connectivity would directly benefit Nepal and help strengthen economic partnership. "Nepal and India are also closely working on a range of areas of economic engagement including energy and water resources sectors," he said.
"Prime Minister Prachanda and I agreed to push for speedy and successful implementation of the ongoing hydro-power projects, and development and operationalization of transmission lines," he added. "This would be a source of much needed energy, and revenue generation for Nepal."
Modi also said that he and the visiting Nepali prime minister have agreed to showcase the shared Buddhist heritage and focus on the development of Ayurveda and other traditional systems of medicine, apart from agreeing to focus on close monitoring and time-bound completion of all development projects.
He said that he and the Nepali prime minister were confident that their decisions Friday would provide strength to the economic engagement and take it to new heights.
The $750-million credit line is over and above the $1 billion -- $250 million as grants and $750 million as a soft loan -- that India announced following the devastating earthquake in Nepal last year that claimed over 8,000 lives.
Likewise, Nepal and India also signed a memorandum of agreement (MoU) for project management consultancy services for upgrading and improving the road infrastructure in Nepal's terai area.
National Highways and Infrastructure Development Corporation Ltd (NHIDCL) -- an Indian government company under the Ministry of Road Transport and Highways tha\t is mandated to build a network of roads in tough terrain, including the north eastern states -- is going to provide consultancy to the Nepal government for construction of 10 postal roads in the terai region bordering India, at a cost of Indian Rs 5 billion.
Likewise, Nepal and India also signed another agreement on a first amendatory dollar credit line for post-earthquake reconstruction projects in Nepal, according to the PIB.
However, Nepal has failed to prepare projects to absorb the earlier line of credit (LoC) of US $ 1 billion announced by Modi in 2014. Nepal has only been able to absorb US $ 550 million out of the total.
A total of 14 road projects including small ones and local ones have been identified that could consume US $330 million, while US $ 200 million has been allocated for two irrigation projects.