STATUS PAPER

ON

Development of Asian Highway Routes , 2013

Fifth Meeting of the Working Group on the Asian Highway and Asian Highway Investment Forum Bangkok, , 7 to 9 October 2013

Dinker Sharma Joint Secretary Ministry of Infrastructure and Transport Government of Nepal October, 2011

Contents Page

Acronyms

1.0 Introduction 1 1.1 The Transport Sector 1 1.2 Strategic Road Networks 1

2.0 Asian Highways 3 2.1 Asian Highway Corridors 3 2.2 Status of Asian Highway 4 2.3 Asian Highway Section in Nepal 4 2.4 Condition of Asian Highway 4

3.0 Development of Asian Highway 5 3.1 Upgrading of Asian Highway 5

4.0 Ongoing Investments – Project Templates 6

5.0 Future Investments Prospects – Project Templates 11 Acronyms

ADB Asian Development Bank AH Asian Highway DoR Department of Roads DoTM Department of Transport Management DoLIDAR Department of Local Infrastructure and Agricultural Roads E-W Highway East- West Highway GoN Government of Nepal JICA Japan International Cooperation Agency LRN Local Road Network LSGA Local Self-Governance Act MoLD Ministry of Local Development MoPIT Ministry of Physical Infrastructure and Transport MRM Mahendra Rajmarga NGO Non –Governmental Organization NRB Nepal Road Board PRA Public Road Act PRM Prithvi Rajmarga RBA Road Board Act TA Technical Assistance TPO Traffic Police Office TRP Tribhuvan Rajpath SBST Single Bituminous Surface Treatment SRN Strategic Road Network SSRN Statistics of Strategic Road Network WB World Bank Status of Development of Asian Highways

1.0 Introduction

1.1 The Transport Sector

"Managing Roads for National Integration and Socio-Economic Development" is the vision for development of roads in Nepal. The transport sector in Nepal is dominated by the road transport which accounts for almost all domestic passenger and freight movements. Air services contribute to passenger movements to key commercial and tourist destinations and are responsible to transport passengers and goods into remote areas of Nepal. Waterways and ropeways transport are practically nonexistent in Nepal.

The first motor able road connecting (capital of Nepal) to the was built in 1956 with the assistance received from the Government of . The decade of 1960 to 1970 saw considerable expansion of road network with significant assistance and contributions from different bilateral donors like India, China, UK, USA and the then USSR etc.

Road network in Nepal is divided into Central Road System and Local Road System as per the National Transport Policy of the country. The Strategic Road Network (SRN) as per Department of Roads (DoR) classification is a part of the Central Road System which also includes the Asian Highway. This System is administered by the DoR and the implementing agency is the Ministry of Physical Infrastructure and Transport (MoPIT). The mission statement for the Department of Roads is "To contribute Towards the Betterment of Living Conditions of the People through Effective, Efficient, Safe and Reliable Strategic Road Connectivity". Local Road System includes urban roads and local roads that are administered by the Local Bodies, Department of Local Infrastructure Development and Agriculture Roads (DoLIDAR) and the Ministry of Local Development (MOLD).

1.2 Strategic Road Networks

The Strategic Road Network (SRN) is a backbone of the National Road Network System. It consists of 21 National Highways and 208 Feeder Roads. The SRN occupies about 33 percent of the National Road Network System and plays a very important role in movement of goods and services in the country.

The function of Strategic Road Network is to provide linkages and connectivity throughout the country. It enables economic growth and development to take place and ensures social harmony together with regional and cultural integration of the country.

In addition to the extension of strategic network, a considerable expansion of the local rural road network has occurred over the past 10 years, the construction of such being undertaken by a large number of local initiatives and agencies – often involving significant local participation.

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Status of Development of Asian Highways

Development of Strategic Road Network (SRN)

20,000 Total SRN

18,000 Highways

Feeder R 16,000 Poly. (Total SRN)

14,000 Poly. (Highways) Poly. (Feeder R)

12,000 11,635 10,835

10,000 9,399

8,000 7,535

6,000

4,861

4,740

4,254

3,933 3,835

4,000 3,570

2,517 2,166 2,000

0

1970 1975 1980 1985 1990 1994 1998 2002 2004

2006/07

2011/12' 2009/10'

It is to be noted that these lengths exclude some sections of the designated SRN that are currently under-construction and which are not open to traffic: additionally many of the ‘earth’ roads, and some of the gravel roads, are seasonal and are impassable to light traffic for much of the year.

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Status of Development of Asian Highways

2.0 Asian Highways

2.1 Asian Highway Corridors

Asian Highway Routes in Nepal

Brahmadev Mandi Mahendra Nagar AH 42

Gadda Chawki Kakarbhitta

AH 2

SN Description Distance in Nepal Asian SASEC SAARC km Highway Corridor Corridor

1 – Kathmandu – 297 AH 42 Corridor Corridor No 2 No 1

2 Kakarvitta – 1,027 AH 2 Corridor Corridor No 4 Brahmadevmandi No 5

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Status of Development of Asian Highways

2.2 Status of Asian Highway

Nepal is connected by two Asian Highways. The Asian Highways are a part of the Strategic Road Networks. They are Asian Highway 2 (AH 2) and Asian Highway 42 (AH 42). The total length of these two sectors within the country is 1324 km. AH 2 originates from in and ends in New in India. It can be further linked with other . Similarly, AH 42 originates from Barhi in India and ends in in China. It is further linked to India by AH 1 and China by AH 5.

2.3 Asian Highway Section in Nepal

Asian Highway 2 (AH 2) AH 2 connects the eastern portion of Nepal at Kakarvitta and passes through Itahari, Dhalkebar, Pathlaiya, Hetauda, Nayanghat, , Kohalpur, Attaria and Mahendranagar. There is a missing link between Mahendranagar and Brahmadevmandi (Nepal). Access through Tanakpur and need to be provided to complete AH 2 and further link with India. The Government of India has taken initiatives to support Nepal to complete the missing link between Mahendra Nagar to Brahmadevmandi. The detailed design works for this section of the road is complete and the land compensation has also been distributed.

The other side of Brahmadevmandi and across the border is Tanakpur in India. The route through Tanakpur and Banbasa need to be defined as Asian Highway Network so that AH 2 connection is complete.

AH 2 covers a length of 1027 km within Nepal. The portion of AH 2 in Nepal is known as Mahendra Raj Marga. The section of the road from Kakarvitta to Mahendra Nagar is 6-7m wide and the condition is generally good.

Asian Highway 42 (AH 42) This section in Nepal starts from Birgunj, a south border town connecting India at , passes through Pathlaiya, Hetauda, Narayanghat, Mugling, Naubise, Kathmandu, Bhaktapur, Dhulikhel, Panchkhal, Lamosangu, Barabise to Kodari (a north border connecting to China). This road is further linked to AH1 at Barhi (India) in south and connects AH5 in China. The total length of this section of road is 297 km. AH42 traces along the major four Highways known as Tribhuvan Rajpath’, ‘Mahendra Rajmarg’ (which is also a part of AH2), ‘Prithivi Rajmarg’, and ‘Arniko Rajmarg’ in Nepal. The pavement width of AH 42 is generally 6-7m and the road condition is good.

2.4 Condition of Asian Highway

Based on condition rating 95% of Asian Highway section in Nepal falls under good/fair category. Only 5 % of network is in poor condition. About 70% % of Asian Highway section has

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Status of Development of Asian Highways

recorded traffic level more than 1000 vehicles per day (vpd), where as 35 % of section has traffic level between 465 to 1000 vdp and 3 % has traffic level less than 465 vpd.

Currently the Asian Highway section is being maintained under normal annual contracting system and some portion of the highway is being rehabilitated with asphalt concrete.

3.0 Development of Asian Highway

The principal aim of Government of Nepal in the Transport Sector is to achieve a better balanced and coordinated system for different modes of transport that exists at present. To this end, the Government is examining the possibility of multi-modal (rail/road) containerized traffic between Kathmandu, the Terai and ports in Indian, involving the construction of Inland Container Depots and improvement of the road.

To meet the larger demand of road maintenance the Government has also promulgated the Roads Board Act with a view to levy toll charges on the road user for effective maintenance of some sections of AH 2 and AH 42.

Possible areas of future Network development are: i) Upgrading sections of the East-West Highway and the Prithvi Highway to suit the introduction of containerized freight transport. ii) The construction of a shorter, more direct route between Kathmandu and the central Terai. iii) A bridge rehabilitation and new construction programme.

3.1 Upgrading of Asian Highway

The Asian Highway AH 2 and AH 42 are in general 6 to 7 m wide. The width varies at different sections. Some sections exceed the average width mentioned above. There are however, some critical sections that need to be addressed but in general the traffic movement is unrestricted within the country.

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Status of Development of Asian Highways

4.0 Ongoing Investments – Project Templates

Asian Highway 2 (AH 2)

Project Template: No. 1 - Asian Highway 2 (AH 2)

 Project Title: East West Highway – Chatara – East West Highway ( Alternate AH 2 connection)

2. Short Description: 3. Physical Location: Koshi Bridge at Chatara is located on the upstream of Koshi River Barrage. It starts from Nadaya on East West Highway (EWH) – AH 2. It will serve as an Brahmadev Mandi Location of Chatara Bridge and East West Highway-Chatara Bridge alternate to Koshi Barrage route. This bridge is being East West Highway Alignment financed by ADB. Mahendra Nagar Gadda Chawki

The alignment starting from Nadaya and passing Kakarbhitta through Chatara Bridge (CB) via EWH- CB – EWH to connect AH 2 again at Fatepur is also being taken up AH 2 under ADB support.

This route after construction will serve as an alternate to AH 2 in case of any damage to AH 2. 4. Proposed Financing Modality: 5. Type of Project Proposal: Bridge Project: Resources Allocation: ADB Grant No: 0150-NEP – US$ Not Applicable 7.0 million and GoN contribution of US$ 8 million Project Name: Emergency Flood Damage Rehabilitation Project (EFDRP) Highway Project: Resources Allocation: ADB Loan No: 3012-NEP – US$ 24.9 m (77.4%), GoN contribution 22.6%. “SASEC Road Connectivity Project” 6. Project Feasibility Indicators: 7. Project Technical Specification: Bridge Project: Under Construction Bridge length is 270 m, 10.5 meters width, pile Highway Project: foundation, 4 spans with 3 piers, steel truss bridge. EIRR = 12%, NPV (NRs in m @ 12% discount) = 2.5 Road Length is 61 km of Asian Highway Standard class III, Bridges 19 numbers. 8. Expected Timeframe for Project 9. Contracting Agency: Implementation: Bridge Project: Department of Roads (Client) Vs CTCE/ Bridge Project: 30 months, expected to be completed Kalika Joint Venture (Contractor) in April 2014. Highway Project: Highway Project: 36 months Tendering works in near future 10. Comments: Construction of Chatara Bridge Project started from ADB grant support as “Emergency Flood Rehabilitation Project”. The Bridge works started in November, 2011. The Road Project is to be carried out under ADB Loan support as “SASEC Road Connectivity Project”. Bidding documents for the Road Project are underway.

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Status of Development of Asian Highways

Project Template: No 2 - Asian Highway 2 (AH 2)

 Project Title: Mahendra Nagar Brahmadev Mandi Connection on AH 2

2. Short Description: 3. Physical Location:

AH 2 link to be This link is located on the Far West of Nepal at the connected with India border with India. This link is yet to be realized. In Brahmadev Mandi absence of this the Asian Highway AH 2 is not Mahendra Nagar complete. There is no link with India through the Gadda Chawki

Asian Highway and further west. Kakarbhitta

AH 2

4. Proposed Financing Modality: 5. Type of Project Proposal: Government of India has committed to support this project as per “Tanapur Treaty”. Estimated Not Applicable. Project cost: NRs 357,790,000/- (US$ 4,472,375) as of 2008. No revision has been made since then. 6. Project Feasibility Indicators: 7. Project Technical Specification: Length of Road = 13.85 km Not available 7 m width, Asian Highway Standard class III.

8. Expected Timeframe for Project 9. Contracting Agency: Implementation: Rites consulting Engineers of India had been Not Available appointed as consultant to this project.

10. Comments:

In fact, a missing link on the AH 2 exists. Connection beyond Mahendra Nagar via Brahmadev Mandi through Tanakpur (India) and Banbasa does not exist. The Government of India has taken inititiative to support and construct this portion of the alignment. The detailed design works is complete and land compensation has been distributed. No progress has been made for a long time (almost a decade).

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Status of Development of Asian Highways

Project Template: No 3 - Asian Highway 2 (AH 2)

 Project Title: Rehabilitation of Belbari Chauharwa Section of AH 2. (40 km stretch)

2. Short Description: 3. Physical Location: This portion lies on the Eastern side of Nepal. The section of rehabilitation starts from the western Brahmadev Mandi Rehabilitation of Belbari side of Koshi River Barrage. This rehabilitation of Chauharwa Road Section 40 km – financed by ADB 40 km portion is a left out section of the original Mahendra Nagar 140 km of Belbari Chauharwa Section. The works Gadda Chawki will strengthen the life of pavement and is Kakarbhitta expected to reduce vehicle operation costs. AH 2

4. Proposed Financing Modality: 5. Type of Project Proposal:

ADB Grant under Sub Regional Transportation Not Applicable Enhancement Project – Grant No: 0225-NEP (SF) ADB contribution – 65.7% GoN contribution – 34.3%

6. Project Feasibility Indicators: 7. Project Technical Specification Construction works are in progress Rehabilitation to the same standard as the existing AH 2. Carriage way width = 7 m of Asphalt Concrete and shoulder width 1.75 m on either side in Double Bituminous Surface Treatment (DBST). 8. Expected Timeframe for Project 9. Contracting Agency: Implementation: Contract No 1: Sichuan – Danfe – Sunauli – Khimti Joint Venture The Project works is expected to be completed by Contract No 2: October 2013. CTCE/ Kalika/ Raman Joint Venture

10. Comments:

Belbari Chauharwa section of AH 2 which is 140 km in length was previously rehabilitated under the Asian Development Bank’s “Road Network Development Project (RNDP)”. Due to heavy rainfall in 2008, 40 km of this section was washed out because of heavy flooding in the Koshi River. This section was thus a left out portion from the RNDP and is now being taken up under STEP funding.

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Status of Development of Asian Highways

Asian Highway 42 (AH 42):

Project Template: No 1 - Asian Highway 42 (AH 42)

1. Project Title: Narayanghat Mugling Section of Road

2. Short Description: 3. Physical Location: This portion is one of the busiest sections of road along the AH 42 highway. Traffic coming across the Narayanghat Mugling Brahmadev Mandi Road Section east and west of the country merge at this section. Improvement – 36 km AH 42 A need has been felt to widen this portion because of high traffic and congestions. The bridges along Gadda Chawki this section are of intermittent stand and need Kakarbhitta improvement or replacement. The World Bank has come up in supporting the Highway (excluding the Bridges) under “Nepal India Regional Trade and Transport Project”.

4. Proposed Financing Modality: 5. Type of Project Proposal:

Resources available: Not Applicable. US$ 101 million from the World Bank (WB) as Loan. Project No: P144335. The GoN is to invest additional 10% for compensation and other expenses. 6. Project Feasibility Indicators: 7. Project Technical Specification:

EIRR: 19.2% Road Length: 36 km NPV: NRs 1232 million at discount rate of 12%. Pavement Width: 7 m (2 lanes) Shoulder: 2 m each on either side in plain area and 1 m each on either side in hill area. Asphalt Concrete proposed. 8. Expected Timeframe for Project 9. Contracting Agency: Implementation:

Three years Not Available 10. Comments:

This Project will ease traffic congestion and smoothen its flow. It will save long hours of waiting along this section and likely to contribute to the economy of the country in terms of vehicle operation saving and reduced travel time. There are 18 bridges along this route which are of intermittent width. Along with the road these bridges also need to be upgraded. Upgrading of the bridges can be taken up as a future investment prospect. Bridge Projects could also be proposed on PPP modality. Dinker Sharma - Nepal Page 9

Status of Development of Asian Highways

Project Template: No 2 - Asian Highway 42 (AH 42)

1. Project Title: Larcha – Tatopani (Kodari) Section Improvement – 7 km on AH 42

2. Short Description: 3. Physical Location:

This 7 km section of the road starts on the north

from Tatopani (China border) to Larcha. The road Barabise –Kodari–12 km Brahmadev Mandi Section Improvement is being constructed with the support of AH 42 Government of China. It also intends to improve the Customs facilities (dry port) at Larcha. This Gadda Chawki Project is basically intended to facilitate the Kakarbhitta customs proceeding at the border.

4. Proposed Financing Modality: 5. Type of Project Proposal:

The resources and funding are being allocated by Not Applicable the Government of China.

6. Project Feasibility Indicators: 7. Project Technical Specification:

Not Available The road is being widened to 12 m in width.

8. Expected Timeframe for Project 9. Contracting Agency: Implementation:

Not Available Not Available

10. Comments:

All works are carried out by the Government of China by the Chinese team.

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Status of Development of Asian Highways

5.0 Future Investments Prospects

Project Template: No 1 - Asian Highway 42 (AH 42)

1. Project Title: Pathlaiya – Nijgadh – Kathmandu (Fast Track Project)

2. Short Description: 3. Physical Location: The Government proposed a first expressway to a four lane standard of 76 km along Nijgadh-Kathmandu Section on a PPP modality. Brahmadev Mandi AH 42

The Concessionaire responsible for getting the Contract Gadda Chawki also was to build an additional two lane road about 18 km from Pathlaiya to Nijgadh along the AH 2. Kakarbhitta

This route is also likely to serve as a transit route Kathmandu Terai Fast Track Road between the two neighboring countries China and

India. 4. Proposed Financing Modality: 5. Type of Project Proposal: Estimated cost - Nijgadh to Kathmandu: US$ 818.66 million and Pathlaiya to Nijgadh: US$ 24.86 million PPP basis on Built - Operate – Transfer (BOT) modality. 6. Project Feasibility Indicators: 7. Project Technical Specification: Feasibility Study conducted by ADB. Study shows high returns from the Project. Four lane road of length 76 km from Nijgadh to Economic and Financial Analyses: Based on the Kathmandu. There are seven major bridges with overall preliminary costs the Economic Rate of Return (EIRR) of lengths over 250m, main span lengths of up to 136 m, the four lane option is 30.92 percent. The financing plan and heights ranging from 50 to 100m. Tunnel of length for the project is not yet decided but, assuming that the 1.35 km. To meet Asian Highway Standard - I Highway project would be fully funded by an international loan (approximating a BOT operation), then the Financial Additional two lane of standard same as AH 2 along Rate of Return (FIRR), using the suggested tolls is 14.6 Pathlaiya Nijgadh section which is along the AH2 percent pre-tax, about 13.6 percent after normal highway. business taxes, and 12.9 percent if income tax is levied. 8. Expected Timeframe for Project 9. Contracting Agency: Implementation: Request for Proposal has been solicited. Latest Concession period of 30 years including construction information as of 20 September, 2013 – No RFP has period of 5 years proposed. been received. 10. Comments: This section of road if implemented will act an as alternate to AH 42 and shorten the road length from 240 km to 120 km. It is likely to act as a backbone for development activities as it will drastically shorten the distance from Birganj (India Border) to Kodari (China Border). RFP had been solicited two times but there was no response from any Companies, although during short listing a number of Companies showed interest and were short listed. The Government is now looking for support from the Donor for implementation of this project.

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Status of Development of Asian Highways

Project Template: No 2 - Asian Highway 42 (AH 42)

1. Project Title: Alternate to Thankot Naubise Section – Sitapaila Dharke Road (AH 42)

2. Short Description: 3. Physical Location: The Section between Thankot to Naubise is very congested due to heavy traffic flowing on Improvement of Brahmadev Mandi Thankot Naubise both sides. A need has been felt to have an Section – 2 lane AH 42 alternate connecting AH 42 from Sitapaila and meeting at Dharke on AH 42. One way traffic Gadda Chawki in each direction is likely to ease traffic congestion and reduce long hours of waiting Kakarbhitta for traffic clearance thus reducing costs in vehicle operation. Kathmandu Terai Fast Track Road

4. Proposed Financing Modality: 5. Type of Project Proposal:

Feasibility Study is in progress from support Not Applicable from Kuwaiti fund Grant TA No: 303. A Grant allocation of 2 million Kuwait Dinar (KD) that is approximately US$ 875,000, has been allocated towards this study. 6. Project Feasibility Indicators: 7. Project Technical Specification Previous Study by JICA in 2002 indicated that the project is feasible. Following are JICA study proposed 2 lanes (7 m width) and a tunnel indicators: length of 0.7 km. A bridge of 50 m is also proposed at EIRR: 18.1 Dharke. Total Lenth of road 21.4 km. NPV: 19.1 million US$ at discount rate of 12% B/C ratio: 1.5 The present study is to propose two lane standards as per existing AH 42. 8. Expected Timeframe for Project 9. Contracting Agency: Implementation:

Not Available. Not Available.

10. Comments:

This Project is very important from the perspective that it will ease the traffic congestion existing at the moment along the Naubise Thankot section of AH 42. Long hours of waiting will be avoided resulting more efficiency and savings in economy. This could be a possible PPP project.

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Status of Development of Asian Highways

Project Template: 3 - Asian Highway 2 (AH 2)

 Project Title: Widening of Bridges along Dhalkebar Pathalaiya Section of AH 2.

2. Short Description: 3. Physical Location: Dhalkebar Pathlaiya Section of AH 2 lies on the mid region of the County. This section is about Brahmadev Mandi Widening of Bridges along Pathlaiya Dhalkebar 110 km in length. A number of bridges (67 Section on AH 2 numbers) along this section is of single lane and Mahendra Nagar Gadda Chawki has almost completed its life cycle (more than 50 Kakarbhitta years old) and is in need for replacement. The length of bridges range from 11.3m to 363.50m AH 2 (total length = 4116). These bridges need to be updated to AH 2 standard. 4. Proposed Financing Modality: 5. Type of Project Proposal:

This Project require budgetary resources and the Can also be taken up in a suitable PPP modality. Government is interested to seek support from the Donor for implementation

6. Project Feasibility Indicators: 7. Project Technical Specification

Feasibility need to be conducted. Bridges of 2 lane standard necessary.

8. Expected Timeframe for Project 9. Contracting Agency: Implementation:

Not Applicable Not Applicable

10. Comments:

The proposed Project could be suitable on a Public Private Partnership basis by raising toll along the section. However, detailed feasibility need to be carried out. The cost of bridges of total length 4116m could be approximately US$ 500 million.

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