The private sector of Nepal has been a constant victim of government inaction, for decades now. The latest in the row is Nepal Purwadhar Bikas Company Limited (NPBCL), headed by outgoing President of Federation of Nepalese Chambers of Commerce and Industry (FNCCI) Kush Kumar Joshi. The company is planning to construct a 2.9 km tunnel connecting Kulekhani and Bhimphedi stretch of Kathmandu-Hetauda road. The proposed tunnel will reduce the Kathmandu-Hetauda road distance to 58 km and travel duration to 45 minutes. It now takes at least four hours to drive between the two cities. 

 

But the Company’s plan to lay a foundation stone for the tunnel on February 8 was dampened by the government inaction and the prescheduled ceremony was just limited to a ritual pooja than the real act of marking the formal beginning of construction. Contrary to the expectation, the government didn’t sign a go-ahead agreement with the NPBCL so as to allow the Company to formally inaugurate the construction of the tunnel on the very day. 

 

The government reservation that the Company didn’t have convincing plans to repay the investors was a mere excuse given the credibility of the people involved as promoters, shareholders and partners of the company. 

 

Firstly, it is promoted by wider participation of local beneficiaries. Though their investment may be small in amount, it would automatically provide a social audit framework for such a large project. As the number of promoters is going to be 264,000, the company is unlikely to be case of one large single obligor insolvency, even if the company, by any chance, met an unexpected fate. 

 

Second, the promoters themselves, including Joshi, are renowned business leaders and the government must have an iota of trust on them. If not, whom will it trust upon to invest in? 

 

Third, there are organizations like Non-resident Nepali Association (NRNA) that have signed agreement to invest and help complete the project in stipulated four-year period. Despite these all, if the officials in the Ministry of Physical Planning and Transport Management had any reservation on any issue, that had to be resolved through negotiation with the company, before setting the date of official inaugural. 

 

The modalities for sharing benefits between promoters and public investors, collection of the toll and plans of financial closure are undoubtedly important for a Rs 20 billion project. But they had to be sorted out well ahead setting the date of formal commencement of the construction. The Company’s approach to take the government’s likely obstruction for granted and the government intention to obstruct in any pretext have given all the wrong messages to the public about the very future of the project. 

 

The government contention that the estimated cost of the project was too low and funding sources were not clearly demonstrated, are not a well-founded. To say the least, it is not the business of the government to tell a private company whether any amount it set aside for the project was enough or not. And, the funding sources the Company has enlisted are of course the most credible ones available in Nepal. 

 

This episode is the combination of government’s unfriendly attitude towards the private sector and ad-hoc working style of Nepali corporate sector. The government must acknowledge the fact that it is the first large-scale private sector initiative to invest in country’s key infrastructure like road project. For this reason, the government should leave no stone unturned to facilitate the execution of the project. And, on the part of the company, there should be more transparent and convincing flow of information, so that the mala fide government intentions could easily be defeated by the strength of public confidence on it. 

 

There are questions whether the entire road from Balkhu of Kathmandu to Hetauda will be developed by the Company or is it constructing the tunnel alone and expects the government to make the rest of 55 km road widened to four-lanes with the tax-payers’ money. In such a case, how will the tolled amount be distributed? 

 

Obviously, the Company must have discussed these things with the relevant government agencies in detail. But the same details have not come to the public notice. Therefore, it is important that both parties, the government and the Company, played a transparent game so that this project can set a benchmark for future such projects.