Several donor-funded road construction projects record dismal progress

KATHMANDU, August 2: The government took a loan from the Asian Development Bank (ADB) in 2018 and proceeded with the Butwal-Narayanghat road upgradation work. But the pace of construction of the road section is shameful. The progress of the 113 km Butwal-Narayanghat road with loan from ADB is also embarrassing. This project, which was contracted in the year 2018/19, was to be completed within 42 months. But even after 52 months, only one-third of the road section work has been completed.

According to the initial contract agreement, this road section should have been completed by August 7, 2022. The Department of Roads has extended the deadline of this project by one year till August 7, 2023. Currently, the overall physical progress of this project is only 37.17 percent. The extended deadline expires within five days. The government took the loan from ADB for 32 years at an interest rate of 1.5 percent and proceeded with the construction of this road.

According to the Ministry of Physical Infrastructure and Transport, the fiscal progress of the project has been 25.85 percent, ie Rs 4.4 billion, till the end of the last fiscal year.

The Narayanghat-Butwal road upgradation project has been divided into two sections – 64.425 km in the eastern section and 48.535 km in the western section – and the upgradation work is underway. So far, construction of 269 out of 462 culverts has been completed under this project. Similarly, the construction of 34 out of 43 general bridges has been completed. Out of 21 main bridges, three have been completed, while 18 are under construction. Similarly, 27 km of the road has been blacktopped. The cost of the project is Rs 16.99 billion.

Shivahari Sapkota, the former director general of the DoR, said that the project has become chaotic also due to the tendency to take loans from donor agencies and enter into contracts without adequate preparation.

Likewise, the progress of the Kamala-Kanchanpur road section under construction with Asian Development Bank’s loan investment is also disappointing. The government had aimed to upgrade this 86.82 km stretch by October 29, 2020 but the deadline has been extended till October 28, 2023. Accordingly, this road should be completed within three months. The overall physical progress of this road section with a cost of Rs 15.665 billion is barely 30.78 percent. Under this project, 70.33 km of road will be upgraded into four lanes and 16.49 km will be of six lanes and 54 bridges should be constructed in this section.

Former Director General Sapkota says that despite the fact that the government did not provide the necessary funds for the projects run on foreign loans, the capital expenditure was not as expected. "The Nepal government has to provide a certain percentage of the budget for projects under construction with foreign loan investment as matching funds," he said, “The Nepal government itself has to pay the amount of compensation for the projects run on foreign loans."

The contract for the Kanchanpur-Kamala road section has been awarded to China Railway No 2 Engineering Group Co, Ltd. The government is becoming a silent spectator even when the Chinese contractor company stops the project work under various excuses.

Similarly, the construction of Nagdhunga-Naubise tunnel project, with loan investment from Japan International Cooperation Agency (JICA), is also delayed. According to the initial contract agreement, this project was supposed to be completed by April 26, 2023. But the deadline for this project has been extended till April 25, 2024. It is doubtful that the project will be completed even within the extended deadline. According to the project, the overall physical progress of the project is 56.89 percent and the financial progress is 59.39 percent as of July 24, 2023.

A 40-year loan agreement has been signed with the Japanese government at an interest rate of 0.01 percent to build the tunnel.

The government of Nepal has a goal of constructing the project with a total cost of Rs 22.5 billion including Rs 6 billion from the government and a loan of Rs 16.5 billion from JICA.

There has also been a delay in the expansion of the Mugling-Pokhara road section. This road section is going to be expanded with a loan from the World Bank. This road section is being expanded by dividing the work into two segments - the eastern section Anbukhaireni-Jamune of 41 km and the western section Jamune-Pokhara of 39 km.

The construction progress of both sections is also not encouraging. The contract for the eastern section was signed in April 2021 and for the western section in August 2021. According to the agreements, the eastern section should be completed by April 2024 and the western section by August 2024. Although there is a year left to complete the work, the physical progress is minimal.

The physical progress of the western section is 8.15 percent and the progress of the eastern section is around 29 percent. China Communications Construction Company has been awarded the contract for the eastern section. The Chinese company Anhui Kaiyuan Highway and Bridge Co. Ltd has also received the contract for the western section.

Amit Kumar Shrestha, head of Mugling-Pokhara Road Project West Section, said that the work could not be accelerated due to the site not being cleared and the delay from the contractor company.

An amount of Rs 6.21 billion will be spent for Anbukhaireni-Jamune in the eastern section and Rs 7.44 billion for the west section from Jamune to Pokhara. This amount is only for road expansion. Apart from that, Rs 1.2 billion will be spent to build a bridge over the Madi River at Damauli in Tanahun and another one billion rupees to build a bridge over the Seti River in Pokhara. In all, more than Rs 15 billion will be spent on the highway expansion.

Former Director General Sapkota said that projects started with loans should be completed as soon as possible to get returns. "The country can get returns only if the projects started with loans are completed on time. Due to the delay, we are missing out on getting good returns from the projects.”