No progress on road projects financed by Indian soft loan

Published On: July 9, 2017 04:15 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, July 8: Road projects financed by Indian third line of credit have made no headway in this fiscal year as well, thanks to differences on pre-qualification of contractors and setting of their eligibility criteria. 

Fifteen road projects and a bridge project were to be started with the mobilization of US$ 350m out of US$ 1000m Line of Credit (LoC) announced during Indian Prime Minister Narendra Modi's visit to Nepal in 2014. After three years, even the contracting process has not started. 

India has been snubbing Nepal's two demands - pre-qualifying contractors on its own and considering Nepali contractors eligible for joint venture with Indian contractors - showing a provision in the LoC that allows only Indian contractors to bid for the projects. The resulting indecision has stalled the projects. 

Officials at the Department of Roads say that the Detailed Project Report (DPR) of the projects were completed late July last year. The projects are listed in the annual national budget of Nepal. 

“We are ready to implement the project but there has been delay in negotiation on pre-qualification of the contractors,” said Gopal Prasad Sigdel, Director General of the Department of Roads. 

The Department of Roads (DoR) had corresponded with India in early June seeking to pre-qualify contractors on its own and allow Nepali joint venture with Indian contractors but they have not received any response from the Indian side yet. 

Implementing agency for the Indian line of credit is Road Improvement Project (RIP), a unit under the DoR. Officials at RIP argued the conditions put by India may lead to complexities in the project implementation. 

A bilateral meeting on Thursday discussed the issue without making any headway. 
Issuing a joint press statement last month, contractors, consultants and engineers demanded that the government of Nepal itself should pick up contractors and more Nepali construction materials should be used in road projects. 

Contractors argued that barring them to participate in the contracting process deprives them from opportunities. They argued Indian intervention on the selection of contractors will lead to another sick project, just as the Hulaki Rajmarga (Postal Highway) or Rahughat Hydropower Project, where contracts were terminated due to non performance by the Indian contractors. 

Laxmi Dutta Bhatta, Senior Divisional Engineer of RIP, hoped that there will be some way forward in the near future. 

Due to the protracted delay, a proposed 800-meter bridge over Mahakali River has now been omitted from the list of projects financed by the LoC. Fresh contract process has been started with the government's own resources. The bridge will connect Chadani and Dodhara villages.

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