"We have approved new selection criteria for the project. Now if a global firm has up to a 10 percent joint stake from Nepali firms, it will get up to additional 10 points in the evaluation process," said Tulasi Prasad Sitaula, secretary at the Ministry of Physical Planning, Works and Transport Management (MoPPWTM).[break]
The ministry took such a decision solely to ensure greater participation of Nepalis in large development projects, Sitaula told Republica. The ministry expects the new provision to facilitate Nepali investor participation in project implementation.
The ministry endorsed the new criteria mainly after the Nepali private sector sought a role in large development projects. Parliament´s Public Accounts Committee (PAC) also had ajudged their demand as rational and instructed the government to ensure an at least 10 percent stake for local investors.
However, the PAC´s instruction had contravened existing law. The Private Financing in Building and Operation of Infrastructure Act requires aspirant investors to have prior experience of executing projects under the Build Own Operate and Transfer (BOOT) system, but no Nepali firm has such experience.
As this complicated and prolonged the bidding process for almost a year, MoPPWTM recently decided to work out new selection criteria to accomodate the PAC instructions.
"Now that the new provision has been endorsed, we will call for fresh bidding within a couple of days based on the new EoI (expression of interest) criteria," said Sitaula.
According to Dinesh Prakash Basnet, chief of the project, the new criteria says that any firm which has successfully completed the construction of highways and bridges costing over US$ 500 million under BOOT or infrastructure projects costing over US$ 1.5 billion over the span of the last 10 years, is eligible to submit EOI for the fast track project.
All firms submitting EOI will be given five months to submit field visit reports, including designing and alignment, to MoPPWTM. "We will then shortlist six companies based on the reports they submit," said Basnet.
The shortlisted firms will then be provided six months to submit their requests for proposal (RFP) along with the technical and financial proposals. The government will pick one of the firms based on the RFP, and sign a concession agreement -- formal permission -- specifying details about consortium equity, obligations and other conditions as well as standards and scope of work.
A study conducted by the Asian Development Bank (ADB) in 2008 estimated the construction cost of the 76-km expressway at US$ 819 million. The proposed four-lane highway is expected to bring about greater mobility of goods and people between the capital and the southern belt of the country and save transport fuel costs by up to 46 percent.
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