The agreement was signed between NPBCL Chairman Kush Kumar Joshi and Chairman of TBi Holdings Bhaban Bhatta amid a function held in Kathmandu on 16 April. Bhatta is a successful NRN based in Japan and is also the Vice President of National Coordination Council of NRN Association.
Addressing the contract signing ceremony, Joshi said that the investment by TBi Holdings will give a boost to much needed participation of the NRN community in developing the tunnel highway project.
The proposed 58km highway, which will link Hetauda with Kathmandu, will reduce travel distance between the two cities to mere one hour.
The ground breaking ceremony of the project, which is estimated to cost over NPR 35bn (USD 362M), was held in November 2013.
"Even as there are some difficulties in government rules, we are committed to completing the project within three years [by the end of 2016]," said Joshi. He said that they have also received investment from NRNs living in Europe, US and Gulf countries.
The tunnel highway is being developed under private financing in Build, Own, Operate and Transfer (BOOT) Act Infrastructure with a ‘4P’ initiative — private, people, public and partnership. Bhatta said that the investment in the tunnel highway is an opportunity to serve the nation. "This highway helps Nepal with efficiency, savings and happiness," he added.
NPBCL is looking for funds to achieve financial closure for the project. In a bid to develop the project, NPBCL plans to put together NPR 10.46bn in share investments from promoters and local people of Kathmandu and Makwanpur, and around NPR 18bn in debt financing. Likewise, it has been planning to make an initial public offering worth NPR 6.97bn to finance the project.
Meanwhile, NPBCL is holding talks with the Securities Board of Nepal (Sebon) for issuing the company’s shares to public. "The project is financially viable. It is a good investment opportunity for investors," Joshi said, adding that they would mobilise local resources to develop the project. "We need to prove the capacity of domestic financial market to build and operate a project through local funding."
The newly-elected President of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and a board member of NPBCL, Pradeep Jung Pandey said that there has been a need to increase investment in infrastructure projects. "The tunnel highway, in particular, will help the nation reduce trade deficit," he said, adding that once the road comes into operation, import of petroleum products could be brought down by around NPR 20bn a year owing to the shorter route.
The government and NPBCL had signed an agreement to develop the tunnel highway under the BOOT Act in May 2013. The proposed highway will have three tunnels with a total length of 4.55km at Chobhar in Kathmandu, and Kulekhani and Bhainse in Makwanpur.
