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New Fast Track Highway: Kathmandu – Birgunj in less than 2 hours

New Fast Track Highway: Kathmandu – Birgunj in less than 2 hours. Dharma Acharya Ponte Vedra Beach, FL April 25, 2009 Phoenix, AZ. Why do we need a new Fast Track Highway?. The current route via Mugling, Narayanghat will not be able to handle the projected traffic growth

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New Fast Track Highway: Kathmandu – Birgunj in less than 2 hours

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  1. New Fast Track Highway:Kathmandu – Birgunj in less than 2 hours Dharma Acharya Ponte Vedra Beach, FL April 25, 2009 Phoenix, AZ

  2. Why do we need a new Fast Track Highway? • The current route via Mugling, Narayanghat will not be able to handle the projected traffic growth • A number of alternatives/bypasses will need to be added to the existing route • The projected capital cost for such expansions will be quite high • Kathmandu needs another good road link from Terai to maintain an uninterrupted service • This link could also serve as a high speed link between Kathmandu and the next International Airport (if built around Simara/Nijgadh)

  3. Previous studies focused on linking Kathmandu to Hetauda and included either tunnel(s) or elevated concrete structures. • Nippon KOEI Study, September 1990 • Nepal Update (Acharya) Study, December 1992 • FINNIDA Study, June 1993 • Priority Investment Plan (PIP) Study, February 1997 • KOICA Study, April 1999

  4. Terrain and existing highways

  5. This study focused more on providing a direct road link from Kathmandu to Birgunj, major traffic originating/terminating points.

  6. Among the four alternatives identified, the Kathmandu to MRM direct link (Alternative # 1) shows the best return on investment.

  7. The costs of constructing new bypass roads and widening of existing roads to accommodate projected traffic growth will be about the same as in Alternative #1.

  8. Alternative # 1 will connect Kathmandu directly to Mahendra Rajmarg with no tunnel(s) and the construction cost of the 95-Km road will be lowest.

  9. Sensitivity analyses show that this project will still be very attractive even under a very conservative scenario.

  10. Vehicles operating between Kathmandu and Birgunj will be traveling 140 Km less. Annual savings in imported fuel requirement will be substantial. • Annual savings in fuel cost will amount to about 10% of the total project cost • This translates to a reduction in foreign currency need of about $5 millions annually • Just the fuel savings will payback the total project cost in 11 years

  11. Nepal will need to ensure a long-term commitment and consistent policies to attract private sector to invest in such public infrastructure projects • Frequent government policy changes discourage private sectors • No assurance that the investor will be able to collect tolls to cover for their initial investment • In order to demonstrate the seriousness in involving private sectors, Nepal may initially like to partnership with the private sector in a couple of infrastructure projects

  12. In the event, neither the private sector nor an international donor agency is interested in partnering in this project, Nepal could still go ahead with this project on her own. This is so because the projected savings is substantial and will have a tremendous positive impact to the country’s economy and society. • Long experience gained in designing and building roads in mountainous areas by Nepali Road Engineers could be utilized • A walk over survey of the proposed alignment needs to done next • A detailed feasibility study should also be conducted • The project could be phased-in over 4-5 year period so that the annual capital budget requirement is kept at the minimum level by spreading the capital cost over multiple years

  13. 2007 ADB Feasibility Study • Oriental Consulting Co. with ITECO and NDRI • Studied 5 Alternatives including a railway • 99 Km total to Pathlaiya and 82Km to EW Highway, 52 Km to Budune (20 Km to Hetauda), (1.4 Km tunnels, $33m) • Project cost $242m (2 lanes), $554m (4 lanes), includes 21Km Hetauda connector from Budune • Distance saving of 150 Km and time saving of 4 hours • EIRR 37% for 2-lane and 18.6% for 4-lane (3A) • Least environmental and social impact • Savings of 5% total fuel consumption in Nepal (32m liters)

  14. Alternatives studied

  15. Current Status of the Project • Put on hold • Bidding Process (switch from BOOT to PPP) • Bank’s lending criteria tightened due to international financial situation • Identified Risks • Forecasted traffic volume • Tunnel – no experience

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