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.

Soil test for metro railway complete

Following the government´s endorsement of the preliminary inception report of the metro railway in Kathmandu Valley, the consulting companies have completed the soil test, which shows how the rail track should be laid -- underground, on the surface or overhead -- in major areas including Ratnapark, Kalanki and Sinamangal. Traffic survey in major junctions inside the Valley, meanwhile, is in progress.

The companies, however, haven´t submitted the soil test results. “The consulting companies have only submitted interim report of the feasibility study,” an official at the Department of Railways (DoR) told Republica on Thursday. 

“Soil test report and traffic survey report will come together.”

Korea Transport Institution, Chungsuk Engineering Company, Kunwa Consulting and Engineering Company, Korea Rail Network Authority and two local companies BDA Nepal Private Limited and EMRC Private Limited are conducting feasibility study of the project.

“The companies have to submit two interim reports before submitting the draft report of the feasibility study,” Rajeshwar Man Singh, superintendent engineer at the DoR said, confirming the progress. “They submitted the first interim report.” 

According to Singh, the first interim report, however, doesn´t provide any conclusive result. “It is a kind of a progress report,” Singh said. “The second interim report gives the result of the soil test and statistics on traffic survey.” 

The metro railway connects various locations in the valley via a 66-km track with 5 lines and 31 stations. A complete feasibility study report of the project is expected within the next six months. “Once the feasibility study report is ready then we can estimate the total cost of the metro railway,” Singh said.

The government has paid Rs 60.5 million to the firms to conduct the feasibility study. The government had approved the inception report last March and cleared the way to conduct the feasibility study for the companies. 

The project requires technical precision and dedicated power system to ensure uninterrupted power supply and has been listed in the national pride project by the government.

The government last May handed over the project along with 13 other mega projects to the Investment Board.

Govt for new Railway Act through ordinance

The government is preparing to enact Railway Bill through ordinance, envisioning formation of an autonomous body to construct and manage the railway, and provide fresh impetus to develop mass transportation.

The government has already assigned numerous firms to carry out feasibility study for East-West railway system and develop underground Metro train system in the Kathmandu Valley.

“We forwarded a draft of the bill to the Ministry of Law and Justice (MoLJ) for its consent on Friday,” said a source at the Ministry of Physical Planning and Works and Transport Management (MoPPWTM). “We will submit it to the cabinet for enactment through ordinance as soon as we get MoLJ´s consent,” the source told Republica.

Among others, the bill envisages a Railway Board (RB) to look after all the development and management of the railway in the country. It proposes that that board will be chaired by the Minister for Physical Planning Works and Transport Management.

The board will be executing the national-pride projects such as east-west railway, Jayanagar-Bijulpura railway and Kathmandu-Pokhara railway and Kathmandu Metro Railway (KMR). “These are the projects that government has already planned,” the official said.

The board can expand and add other projects in the future, if it deems necessary and feasible.

As per the act that has been sent to the MoLJ, the seven member board comprises secretary of the MoPPWTM, finance secretary, commerce secretary, home secretary and two railway experts, .

“The enactment of bill will lead to the dissolution of Department of Railway (DoR) and Nepal Railway Company Ltd,” one of the officials at the MoPPWTM said. As the DoR was established without any legal provision, it can be dissolved through cabinet decision.

Tulsi Prasad Sitaula, secretary at the MoPPWTM has confirmed that the ministry has pushed for the enactment of railway Bill through ordinance. “This act is necessary to carry out the railway projects. Though we have Railway Act 1961, it has become obsolete,” he said.

According to the draft bill, the government will also set up a special fund to support the operations of the RB. It hopes the RB to be self-dependent in the long run.

Railway dept won't get a single penny in 2012/13

Though the government plans to lay down 4,000 km railway lines across the country within the next 20 years, it has not allocated even a penny for the Department of Railway (DoR) - the implementing agency - for the coming fiscal year 2012/13.
“Our parent ministry, the Ministry of Physical Planning and Works (MoPPW), has not arranged budget for us for the upcoming fiscal year. I have been asked to get budget from the Department of Roads,” Ram Prasad Lamsal, director general of DoR, told Republica.
The government had formed DoR in June last year with an aim to speed up the process of laying down railway lines.
Minister for Physical Planning and Works Hridayesh Tripathi, however, said the government has allocated budget for DoR. “The only thing is that it hasn´t been allocated under a separate heading due to some technical reasons,” Tripathi said.
Sources at the finance ministry, which is in the process of planning budget for the next fiscal year, admit that there has been no budgetary allocation for DoR. “We allocate budget as per the request of the concerned ministry,” Lok Darshan Regmi, joint secretary of Ministry of Finance said. “MoPPW didn´t propose separate budget for DoR for the coming fiscal year.”
The government had allocated Rs 7 million to DoR as recurrent expenditure in the current fiscal year. It had established the department with a vision of developing 4,000 km railway line across the country, including the East-West Railway, Kathmandu-Pokhara Railway, Kathmandu-Tibet Railway and railway lines that connect major bordering towns of India and Nepal, within 20 years.
Moreover, it is supposed to oversee management of railway, metro rail, ropeways and cable car lines in the country.
“If we are to get budget from the Department of Roads, what is the point behind forming a separate department,” Lamsal said.
Ironically, the government has identified East-West Railway as a national pride project and most of the railway projects are in the government´s first priority (P1).
Minister Tripathi, who said DoR was not allocated budget due to technical reasons, throughout the week was lobbying with the government through parliamentary committees to allocate budget for Jayanagar-Bijulpura railway.

Provide Rs 1.25 billion for Janakpur-Bijulpura railway project, PAC tells MoF

Public Account Committee of the Parliament has directed Ministry of Finance (MoF) to provide Rs 1.25 billion to the Department of Railway (DoR) within a week so that it can acquire land for the construction and expansion of Janakpur-Bijulapura railway track, which India has agreed to develop.
"The committee directs MoF to allocate the required budget for land acquisition within a week," Ram Krishna Yadav, chair-person of the committee said after a hearing on Monday. The DoR said it needs Rs 1.25 billion for completing the land acquisiton process.
"The committee also directs the Ministry of Physical Planning and Works (MoPPW) to distribute compensation to the land owners within a month," said Yadav.
Project to develop Janakpur-Bijulapura railway track was agreed between Nepal and India in February 2010, when President Ram Baran Yadav visited India. Under the project, the Indian government agreed to upgrade the existing 51-km long railway track to broad gauge and extend it up to Bardibas, a major junction along the East-West Highway.
But the project has stalled since the MoPPW placed the project in least priority. As a result, the MoF had been reluctant to provide budget for the project.
On Monday, however, MoF officials said the ministry was trying its best to arrange budget within this fiscal year. The committee, after hearing the MoF officials, instructed the ministry to manage the required fund by pooling the unspent budget from other projects.
Lawmakers in the committee also asked Minister for Physical Planning and Works Hriyedesh Tripathi to raise complications that he faced due to diverse status of land owners with Prime Minister Dr Babu Ram Bhattarai and sort out the problem.
Tripathi said the land being acquired by the government was agricultural land. "If we did not compensate the farmers right away, the locals will simply not handover the land to us. This will only subject us to difficulty," said he, demanding release of complete fund at one go.
According to DoR, it needs to acquire a total of 220 hectares of land from Janakpur to Bijulpura to upgrade the existing track.

Project to upgrade Janakpur-Bijalpura railway line in limbo

The much-touted program of upgrading the existing Janakpur-Bijalpura railway track and extending it up to Bardibas, a major junction along the East-West Highway, has landed in troubled waters after the government failed to arrange budget for land acquisition.
Acquisition of land is crucial for the project as the government cannot kick-start the project without completely taking over the land on which the track will be laid.
“The program is already two years old. Sadly, we are still facing dearth of capital to compensate the landowners and complete the formalities of acquisition,” said a senior official at the Ministry of Physical Planning and Works (MoPPW).
To complete the acquisition, Department of Railway (DoR) has assessed it would need a total of Rs 1.25 billion. It has long been pushing the MoPPW and Ministry of Finance (MoF) to arrange at least Rs 300 million to kick-start the process.
“MoF about a month ago had even informed us that it has agreed in principle to pledge the fund by transferring fund from other projects that have not used their allocations,” said Minister for Physical Planning and Works. “But we never got the money. And unfortunately, MoF now says it cannot provide us the fund.”
Interestingly, the latest obstacle to arrange fund for the project has surfaced after MoF realized the project - that stands as one of the important components of the East-West Railway Line - was rated as Priority 3 (P3) project by the MoPPW.
“East-West Railway clearly is a ´national pride´ project. We had never guessed one of its important components will be placed in the least priority project,” said a source, disclosing that this very mismatched prioritization by the MoPPW made MoF to refuse fund for it.
Going by the existing norms, MoF can transfer funds (in case of poor spending by other projects) to important project. But those projects have to be listed under P1 projects.
“The complication, meanwhile, has put the project in an uncertainty,” said an official at DoR.
The DoR has further notified the MoPPW and MoF that it would not be able to start the project if the government did not correct the order of priority of the project immediately.
According to DoR, it needs to acquire a total of 220 hectares of land from Janakpur to Bijulpura to upgrade the existing track. India has allocated Rs 600 million in its project to upgrade the 51-km rail track from Janakpur to Bijulpura.