The two donor agencies have said that if such factors are not made clear in advance, the project may face serious trouble once it comes into implementation.
"The WB and the ADB have lately urged the government to make clear risk sharing factors that are associated with public-private partnership projects (PPP)," Purna Kadariya, secretary at the ministry of physical planning and works, told Republica.
Private builders will not bear losses incurred due to factors such as continuous strikes, insurgency or fluctuation in foreign currency rates, said Kadariya.
However, the private company should be responsible if the project incurs any loss due to for instance the company´s failure to make arrangements for the necessary budget, he explained. "The donor agencies urged the government to make for clarity in such clauses," he further said.
Kadariya earlier briefed lawmakers on the latest progress of the project, at a meeting of the Parliamentary Development Committee.
The government has listed two companies -- Landmark Korea and Reliance India -- after the pre-qualification process for the project which aims to connect Kathmandu to the Tarai. The government wants to construct the road under the Build Own Operate and Transfer (BOOT) model.
The government envisions constructing a four-lane road of international standard. The proposed 80-kilometer road will connect the capital city with Nijgadh in Bara district. One has to travel 270 kilometers to reach Nijgadh from Kathmandu by existing roads.
The design of the road had been approved by the cabinet in October 2007 and the government in April 2008 decided to construct it under the BOOT model.
The WB approved a technical grant assistance for the project in April 2008 and later the ADB also approved similar assistance following a government request.
The current budget has announced that Nepal Army personnel would be mobilized to lay out the track for the road.
Responding to queries fielded by lawmakers, Kadariya said the NA will be deployed only after making the terms of reference (TOR) clear. The ministry itself will be looking after issues regarding land acquisition, conflict resolution and environment-related matters, among other things. "The NA men will be deployed only for construction work under the TOR," he said.
Once the proposed road is constructed there will be an alternative road from the capital to the eastern Tarai and hill districts. At present there is no alternative to the Prithivi Highway to connect Kathmandu to the entire eastern and western parts of the country.
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