The Ministry of Physical Planning and Works (MoPPW) -- the implementing agency of the mega project -- had cancelled the process of selecting bidders on March 15, following direction from the parliamentary Public Accounts Committee (PAC) that sought participation of Nepali investors in the bidding process irrespective of their experience.[break]
The PAC´s direction is against the existing Private Financing in Build and Operation of Infrastructure Act 2006 and its regulations 2007. As per the act and the regulations, only the companies having experience of implementing projects under the Built Operate and Transfer (BOT) system as per the Public Private Partnership (PPP) model can vie for the job.
The parliamentary committee had also directed the MoPPW officials to give arrange bidding time of four months and ensure at least 10 percent domestic investment in the project.
Seven global companies had participated in the bidding and submitted their Expression of Interest (EOI) to invest in the multi-billion-rupee project.
“The process of short-listing eligible companies for the construction of fast-track has come to a virtual halt with the cancellation of the process. We are in serious confusion on whether to abide by the existing laws or follow the PAC´s instruction,” said Saroj Man Shrestha, chief of the Kathmandu-Tarai Fast Track Project.
Following the PAC´s instructions, senior officials of the MoPPW met PAC members, seeking clear direction on resumption of the process. However, PAC members did not give any instructions to the officials.
“We have yet to receive any response from PAC members even though it has already been too weeks since we sought their instructions,” added Shrestha.
PAC on March 1 had directed the ministry to ensure at least 10 percent domestic investment in the project and not to put any pre-requisites like experience of BOT for Nepali firms interested in developing the 76-km express highway.
“It would be violation of existing laws if we followed PAC´s instructions. We can´t also disobey the PAC instructions by proceeding with the project,” said a high level source at the ministry.
As per the revised estimation by the Asian Development Bank in 2008, the proposed express highway would cost $800 million.
Due to dispute with landowners over compensation amount, budget worth Rs 40 million allocated for current and previous fiscal years has remained unused. The project is acquiring a total of 140 bighas of land (both private and government land). Owners of some 60 bighas of land are still to receive compensation.
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