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The Government of Nepal, han canceled a UD$1 billion expressway project with Infrastructure Leasing and Financial Services Ltd (IL&FS).

The Kathmandu - Nijgadh - Pathlaiya highway PPP project aimed to connect the capital of the country, Kathmandu, with the southern Terai region near the Indian border. A new international airport is also in planning in the region. 

According to the Minister for Physical Planning and Infrastructure Development, Ramesh Lekhak, the government would now complete the project with domestic resources. The government presented a new proposal to the Cabinet for constructing the road with own investment.

The project, which would be developed on build, operate and transfer (BOT) basis, involved:

• survey, design, engineering, financing, procurement, construction, operation, maintenance, and transfer of the approximately 76 km long Kathmandu to Nijgadh Expressway; and
• survey, design, engineering, financing, procurement, construction and transfer to MOPIT of an approximately 18 km long two to four expanding project of the Nijgadh to Pathlaiya section of the East West Highway.

According to the feasibility study prepared by the Asian Development Bank (ADB) in 2014, the project alignment from Km 27 to 40 passes through difficult mountainous terrain involving a 1.35 km long tunnel and 8 bridges with piers 40 m to 105 m high. In the Km 41 to 67 section, there are 8 bridges with pier height from 40 m to 70 m.The road project was estimated to cost US$960 million.

IL&FS had already prepared a detailed report for the project that increased the project cost to US$1,117 million.

Nepal’s road network is growing but there is an enormous need for more investment. A study in 2007 revealed that the country had 10,142km in all of surfaced roads and a further 7,140km of unsurfaced roads.  

Because Nepal is landlocked, it relies on its transport links with China and India for trade and the nearest port is in Kolkata (Calcutta). But there is only one dependable road link between the Kathmandu Valley and India at present and the development of a new route will bring enormous economic benefits.