Govt likely to scrap agreement with Benchmark Ltd

The Benchmark Company Limited (BCL) is likely to lose the contract for developing the proposed 170km Kathmandu-Birgunj Electric Railway as it has failed to complete feasibility study and environmental impact assessment (EIA) on time.
The government had awarded the project to BCL in 2006 under the build-own-operate-transfer (BOOT) model.
"We might scrap the agreement with BCL as failed to complete feasibility study and EIA on time," said Dipendra Bahadur Kshetry, vice chairperson of the National Planning Commission (NPC). "But we will also consider the progress it has made on the project so far before scrapping the agreement.”
According to a highly placed official at the Ministry of Physical Planning, Works and Transport Management (MoPPWTM), the agreement between the government and BCL is expiring on Wednesday. "The company has not even estimated the cost of the project," Tulsi Prasad Sitaula, secretary at the ministry told Republica.
The company submitted its preliminary report on Tuesday to the ministry. "We have asked the company to estimate cost and benefits of the project," Sitaula said. "The government would move ahead only after the contractor company estimates the cost and benefit of the project."
However, the ministry is not authorized to scrap the agreement with the company. "The BOOT committee led by NPC Vice Chairperson Kshetry would take a decision in this regard," said Sitaula.
The government had awarded the project to the company under the BOOT model. “But this project is supposed to be developed under the public-private partnership (PPP) model," Sitaula said. "The project is an important one but the government is not clear whether or not to renew the agreement with the contractor company."
According to Sitaula, the company has tentatively estimated the cost of the project to be Rs 38 billion. "But this is not a well calculated figure," he said. "We have asked them to come up an exact estimate."
Earlier, the government had extended the deadline for the company to submit feasibility study and EIA report by four months. "I don´t see any point in further extending the deadline," the official said.