Reliance close to Terai highway deal in Nepal

August 15th, 2008 - 4:19 pm ICT by IANS  

Kathmandu, Aug 15 (IANS) After its failure to penetrate Nepal’s thorny hydropower sector, Indian blue chip company Reliance is now edging close to sealing a major construction deal in the Himalayan republic. Reliance Infrastructure edged out peers Gammon India and Punjab National Bank’s joint venture Everest Bank to make it to the shortlist of companies chosen to build a 77 km fast-track highway that will link Kathmandu Valley with the Terai plains.

Nepal’s physical planning and works ministry said it had shortlisted Reliance and South Korea’s Landmark Worldwide Company for a massive highway project that, according to initial estimates, will cost about Nepali Rs.50-67 billion ($780,000 - $1 million).

Expected to be completed by 2014, the highway will run from Khokana in central Lalitpur district to Nijgadh in Bara district in south Nepal.

A feasibility study conducted with technical assistance from the Asian Development Bank (ADB) assesses that the highway will reduce travel time from south to central Nepal by almost two hours and slash fuel costs by over 32 million litres annually.

Tulsi Sitaula, director-general of the department of roads, told the media the two shortlisted companies have been asked to submit their proposals by January 2009. The work is expected to start from April next year.

Sitaula said the final selection would be made on the basis of the lower bid as well as the toll charge imposed on passing vehicles and benefits to the government of Nepal, which were not specified immediately.

If Reliance swings the deal, it would operate the highway for 30 years under the Build-Operate-Transfer (BOT) model under private financing in Nepal’s Infrastructure Development and Operations Act.

The feasibility study recommends either a two or four-way lane.

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