Ministry directs DAOs to fix land lease rate for tunnel highway

KATHMANDU, DEC 03 -The Ministry of Physical Infrastructure and Transport (MoPIT) has directed District Administration Office of Kathmandu and Makawanpur to fix the lease rate of the government -owned land which will be used for the construction of Kathmandu-Hetauda Tunnel Highway.

The ministry instruction follows a request from Nepal Purbadhar Bikas Company Limited (NPBCL), the project developer, seeking the government land for the four-lane highway. “A committee under the coordination of Chief District Officer of the respective districts will fix the lease rate,” said Tulasi Prasad Sitaula, secretary at the ministry.

The committee comprises government officials from Land Revenue, Land Reform, District Development Committee and representatives from the developer. It will come up with a rate based on the market price, according to Situala. The project is being developed under the build-own-operate and transfer (BOOT) Act based on the agreement reached between the government and the NPBCL.

The act allows the investor to operate the project for 30 years before handing it over to the government . Under the agreement signed between the two sides in May this year, the government could provide land along the route of the proposed highway to the developer on lease. Similarly, 50 percent of the income from the leased land has to be provided to the municipality or village development committee concerned by the MoPIT.

However, the NPBCL will be responsible to acquire private land and the government can help in the event the company fails to get land from individuals. Land acquisition has been one of the major hurdles in most of the infrastructure development projects. But the company believes land acquisition would not be a problem as the project is being developed with the investment of the local people too.

The developer has stated that it completed work on fixing the criteria for the acquisition of private land and distribution of compensation. The landowners who will have to give up their land will be offered shares in the company on the basis of the value of their property. As much as 40 percent of the shares would be offered to the general public and the promoters would hold the rest, according to the company.

The tunnel road, estimated to cost Rs 34.5 billion, will start from Balkhu in Kathmandu and reach in Hetauda passing through Kulekhani. With three tunnels in Chovar, Khulekhani and Bhaise, the raod is expected to cut the travel times between the Capital and Terai drastically, making it possible to reach Hetauda in an hour.

NPBCL, 5 merchant banks join forces
Meanwhile, the NPBCL has joined hands with five merchant banks to raise capital required for the construction of Kathmandu-Hetauda Tunnel Highway. The NPBCL signed an agreement with Citizen Investment Trust, Nabil Investment Banking, Vibor Capital, NMB Capital, and NCM Capital to this effect on Sunday.

The companies will work to raise resources by promoting investment among the potential individuals and institutions both in and outside the country, according to the NPBCL. Together with the NPBCL, they will be exploring possible sources of investment, market promotion  and management until the issuance of initial pubic offering.