TBi Holdings Japan is investing Rs 1 billion in Nepal Purbadhar Bikash Company, the developer of Kathmandu-Kulekhani-Hetauda Tunnel Highway.
The company promoted by non-resident Nepalis (NRNs) TBi Holdings Japan chairman Bhaban Bhatta and Nepal Purbadhar Bikash Company chairman Kush Kumar Joshi signed a share purchase agreement today to invest Rs 1 billion in the first toll highway to be constructed by the private sector in public participation.
Bhatta – a successful Japan-based NRN and vice president of National Coordination Council of NRN Association – on the occasion said that the investment in the tunnel highway is an opportunity to serve the country. “This tunnel highway will help Nepal become more efficient savings time and money.”
The proposed 58-km highway will have three tunnels – at Chobhar in Kathmandu, and Kulekhani and Bhainse in Makwanpur – with a total length of 4.55 km. Currently, people either have to travel 133 km along the Tribhuvan Highway or 227 km along the Prithvi Highway to reach Hetauda from the Capital.
Likewise, 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 toll highway that will link Hetauda with the capital in one-hour drive is estimated to cost Rs 35 billion.
He also committed to complete the project in time despite some regulatory troubles. “The company has also received investment from NRNs living in Europe, US and Gulf countries,” he added.
The tunnel highway will be constructed under private financing in Build and Operation of Infrastructures Act (BOOT Act) with a 4P initiative – private, people, public and partnership.
Nepal Purbadhar Bikash Company – an infrastructure development company promoted by the private sector – plans to put together Rs 10.46 billion in share investments from promoters and locals in Kathmandu and Makwanpur, and around Rs 18 billion in debt financing.
Similarly, it is going to float shares to public worth Rs 6.97 billion – the first of its kind in the country – to finance the infrastructure project.
Joshi also said that the company is also holding talks with Securities Board of Nepal (Sebon) to issue initial public offering to public.
More investment in infrastructure projects like tunnel highway will help the country reduce trade deficit due to efficient transportation, saving of fuel import that could – according to an estimate – bring down by around Rs 20 billion a year because of the shorter route.
Nepal Purbadhar Bikash Company and the government had signed an agreement to construct the tunnel highway under BOOT Act last May. It plans to complete the highway by the end of 2016 according to the agreement. The ground breaking ceremony of the project was held in November 2013.