INFRASTRUCTURE AND

TRANSPORTATION
Private Sector Investment in
Transport Infrastructure

Gopal Prasad Sigdel

Joint Secretary,
Ministry of Physical Infrastructure and
Transport
BRIEF COUNTRY
PROFILE
• A land-linked, not a landlocked country
• Unitary to Federal Structure (Stable
Governments at Federal, Provincial and
Local levels)
• Economic Growth Rate: 6.3% (2017)
• Total Budget: USD 12.15 billion (2018‐2019)
• Aims to graduate to middle income country
by 2030
INFRASTRUCTURE SCENARIO

ROAD DENSITY URBANIZATION INFRASTRUCTURE

Nepal: Urban Area Population: Investment need:
(139 km/1000 km2) ~20% US$ 17.70 billion/year for
South Asia: Growth Rate: SDG target
(1123 km/1000 km2) 5%
OVERVIEW OF TRANSPORT
SECTOR
• Major Modes of Transportation: Road and Aviation
• Developing Modes: Railways and ropeways (Cable cars)
• Sectoral growth of transport, communication and storage: 5.4% (FY
017/18)
• Contribution to the GDP: 8.0%
• Investment Plan for next 5-year: US$ 8.2 billion
• Road Network: 70,000 km (SRN and LRN)
• Road Connectivity: 76 out of 77 district headquarters
OVERVIEW OF TRANSPORT
SECTOR
CURRENT STATUS OF AVIATION SECTOR:
• Tribhuwan International Airport (TIA): Upgradation
• underway
Regional Airports: 3 under expansion plan (Nepalgunj,
Dhangadhi)
Biratnagar,
• New International Airports: Gautam Buddha and Pokhara
International Airport coming into operation within 2019 and 2020
respectively
•• Nijgadh
Domestic Airports: 32 outAirport:
International of 50 are in operation
Land Acquisition and EIA
completed, private sector called for development
OVERVIEW OF TRANSPORT
SECTOR
• Railway Plans: East-West, South-North connecting India and China
• Waterways Plans: In the Koshi, Gandaki and Karnali Rivers. Policies, Laws
and Institutional arrangements areunder development
 EVOLUTION OF POLICY AND LEGAL
PPP Policy,
FRAMEWORK Foreign
Investmen
Hydropower Policy, tand One-
Public Electricity
Window
BOT Policy
Infrastructure Private Financing Policy Regulatory
in Public Commission
Hydropower
BOT Infrastructure Act PPP and
Policy,
Policy on (BOT) Act and Investment
Electricity Act,
Road Regulation Act, FITTA
Sector
1992 1992 1996 2000 2004 2012 2016
2008
INSTITUTIONAL ARRANGEMENTS

Institutional arrangements (Policy Level)

• Ministries (Physical Infrastructure and Transport; Federal
Affairs and General Administration; Culture, Tourism and Civil
Aviation)
• National Planning Commission and Investment Board Nepal
Regulatory and implementation level
• Departments (Road, Local Infrastructure, Railways, Transport
Management)
• Civil Aviation Authority, Roads Board Nepal, Waterways office
POLICY PROVISIONS, REFORMS AND
INCENTIVES
• Provision of Viability Gap Funding (VGF): PPP and Investment Act, 2019
• Concession Period: Not limited
• Subsidy Policy: Determined on case to case basis by the Government
• Unsolicited Proposal: PPP and Investment Act, 2019
• Land Acquisition: Facilitated by the Government
• Risk Sharing: Provision of risk sharing between Private and Public Sectors
• Environment: Clear legal provision on environmental standards
• Repatriation: Allowed in FDI projects
EXPERIENCE OF PRIVATE INVESTMENT
IN PUBLIC INFRASTRUCTURE
• In Hydropower Projects: Widely and Successfully practiced under
BOOT Model (Bhotekoshi, Khimti, Arun-3 etc.)
• In Ropeways/Cable Cars: Several projects in
operation (Manakamana, Chandragiri, Kalinchowk, etc.)
• In Road & Airport: In Planning (Nijgadh International Airport)
• In Urban Development: In development phase (Solid Waste Management
Project – Kathmandu)
POTENTIAL/READY-TO-GO
PROJECTS (ROADS)
1. North-South Corridors (8 Projects)
• Mohana-Dhangadi-Atariya-Baitadi-Darchula-
Tinker
• Nepalgunj-Surkhet-Simikot-Hilsa
• Bhairahawa-Palpa- Kusma-Beni-Jomsom-Korala
• Birgunj-Galchi-Rasua-Syafrubesi
• Birgunj-Naubise-Kathmandu-Tatopani-Khasa
• Janakpur-Dolakha-Lamabagar-China border
• Rani-Itahari-Hile-Kimathanka-China border
• Kechana-Taplejung-Olangchungola- Tiptala
POTENTIAL/READY-TO-GO
PROJECTS (ROADS)
2. Mid- Hill Highway/Puspalal Highway
3. Hulaki Marga/Postal Highway
4. Madan Bhandari Highway
5. Kathmandu- Terai/Madhes Fast Track (PPP
Operation)
6. Nagdhunga Tunnelway (PPP Operations)
7. Kathmandu - Kulekhani - Hetauda Tunnel Highway
POTENTIAL/READY-TO-GO
PROJECTS (AVIATION)
8. Maintenance, Repair and Overhaul (MRO) in Aviation Sector
9. Pokhara Regional International Airport (PPP Operations)
10. Gautam Buddha International Airport (PPP Operations)
11. Nijgadh International Airport (PPP Construction and
Operations)
12. Management and Operations of Tribhuvan International Airport
13. Biratnagar Regional International Airport
14. Dhangadi Regional International Airport
POTENTIAL/READY-TO-GO
PROJECTS (WATERWAYS AND
CABLE CARS)
15. Waterways: Koshi, Gandaki and Karnali rivers connecting India
16. Cable Cars: Jomsom, Muktinath, Swargadwari, Pathibhara,
Maulakalika, Jalpadevi, Annapurna-Sikles, Khaptad, etc.
POTENTIAL/READY-TO-GO
PROJECTS (MASS
TRANSPORTATION)
17. Bus Rapid Transit (BRT): Ring road in Kathmandu, Buddhist and
Ramayan Circuit
18. Metrorail: Kathmandu Valley
19. Urban Transport: In major Cities (Pokhara, Biratnagar, Nepalgunj,
etc.)
20. Inter-state & Intra-state Public Transportation: All 7 Provinces
POTENTIAL/READY-TO-GO
PROJECTS (RAILWAYS)
21. East-West Electrified Railway
22. Kathmandu-Pokhara-Lumbini Electrified
Railway
23. Kerung-Kathmandu Railway
OPPORTUNITIES

• Huge infrastructure gap

• Government's priority for infrastructure
development.
• Political Stability and consensus on FDI
• Enabling Business Environment
• Conducive Institutional and Legal environment
• Sound Law and Order
Thank You