Chinese-Nepali Joint Venture Set to Manage Nepal's First Modern Tunnel Road

Kathmandu. A joint venture (JV) between a Chinese state-owned company and a Nepali company is set to secure the responsibility for the operation and management of the country's first modern road tunnel, the 'Nagdhunga-Sisnekhola Tunnel Road'. The Chinese state-owned company Chongqing Yujin Road and Bridge Development and the Nepali company ART Construction (Yujin-ART JV) are confirmed to take charge as they submitted the lowest financial bid.

Out of the 10 companies that participated in the tender called for the tunnel's operation, 7 were deemed technically qualified. Among them, the Yujin-ART JV is set to receive the operation contract for the next 5 years after proposing a bid approximately 40 percent lower than the cost estimate. This JV has proposed to operate, manage, and maintain the tunnel for about 1.10 billion rupees.

According to Saumya Nepal, Project Chief of the Nagdhunga Tunnel Road Project, the official announcement regarding the finalization of the contract process will be made in a few days. Nepal stated, 'The financial proposal has been opened, and the Yujin-ART JV has emerged as the lowest bidder. The notice of intent will be issued within the next 1-2 days after the approval process is completed by the Director General of the Department of Roads.'

The project aims to conclude all paperwork and agreement processes by the end of Chaitra (mid-April). Preparations are underway to select and train staff and begin vehicle testing inside the tunnel by the month of Baisakh (mid-April to mid-May). If all processes proceed systematically, the tunnel will be formally opened to the general public by the last week of Jestha (mid-June), informed Project Chief Nepal.

Skepticism over Operation Due to 'Low Bidding'; Responsibilities for Operation

Competing companies, including Samanantar Nirman Sewa, Kalika Group, and other large international firms, had submitted proposals with reductions of up to about 30 percent from the cost estimate. However, the Yujin-ART JV's bid to work for 40 percent less has raised some skepticism among project officials.

Stakeholders argue that the operation of this tunnel could be challenging due to the persistent problem of declining work quality following 'low bidding' in Nepal's public procurement.

The company awarded the operation contract will be responsible for maintaining the tunnel for 5 years, as well as overseeing the 2.8-kilometer access roads on both the Kathmandu and Dhading sides. The company will be responsible for controlling traffic volume and speed inside the tunnel, keeping a 'rescue team' ready for immediate response during fires or accidents, and managing ventilation and lighting systems.

A total of 150 personnel will be deployed for security—64 for safety and 54 for toll collection. The tolls collected from the tunnel will be deposited into the account of the Road Board Nepal, while the operating expenses will be borne by the government. Currently, entry fees and entry permits have been set for vehicles other than two- and three-wheelers.

Toll Tax Collection to be Implemented in Three Ways for 6 Months

A modern and scientific toll fee (road charge) collection system is set to be implemented at the Nagdhunga Tunnel Road. According to Ganesh Bahadur KC, Executive Director of the Road Board Nepal, three types of systems—cash payment, digital, and automated (RFID)—are being prepared for operation to facilitate travel through the tunnel.

The Board has a long-term goal of making this system completely 'cash-less' and technology-friendly. Similar to India, Nepal will implement a 'hand-tag' (prepaid card) system where an RFID chip will be affixed to the vehicle's windshield. A sensor at the gate will scan this chip, and the fee will be automatically deducted from the prepaid account without the vehicle stopping.

'Manual systems can lead to long queues, and even digital systems might require vehicles to stop,' said Executive Director KC. 'But the RFID system will complete the process in 10 to 30 seconds and automatically open the gate, saving both time and fuel.'

The Board plans to introduce a difference in fees to encourage the use of digital and automated systems. Vehicles using N-Tag or installed technology will be charged a lower fee (for example, 150 rupees), while those wishing to pay in cash may incur a slightly higher fee (up to about 250 rupees) as a penalty, KC informed.

Chip or Hand-Tag Available Through Banks; 5 Banks in Final Competition

The Nepal Rastra Bank has already made arrangements allowing commercial banks to issue such RFID chips or prepaid cards for toll tax collection. Currently, Global IME, Nabil, Kumari, Machhapuchhre, and NMB Bank are in the final competition for this process.

Vehicle owners will need to submit their vehicle registration certificate, photo, and updated KYC documents to obtain the chip or hand-tag from the bank. After the RFID system was implemented in India, toll collection became easier, and revenue collection increased. It is expected that once this system is fully implemented in Nepal, revenue leakage will be stopped, and sufficient funds will be accumulated for road maintenance.

It is anticipated that there might be some traffic jams in the initial phase as many vehicles may not have chips installed yet. Therefore, the Board will operate an alternative system (cash and scanning) for 6 months. However, in the long run, this system is certain to eliminate the Nagdhunga jam, save time and fuel, and make the tunnel journey world-class. The Road Board has stated that after the success of Nagdhunga, this 'Electronic Toll Collection' system will be expanded to other toll gates across the country.

Work on West Portal to Conclude by Late Baisakh

Physical construction of the tunnel is currently at 98 percent completion. Work on constructing the toll plaza and landslide control at the west portal on the Dhading side is currently underway at a rapid pace. Project Chief Nepal stated that the landslide prevention work will be completed by Baisakh (mid-May).

He said, 'Landslide prevention work is progressing rapidly. Even if this work extends to Baisakh, we are preparing in a way that it will not obstruct vehicle movement inside the tunnel.'

Furthermore, the project stated that the completion of that work will not impede the operation of the tunnel. The project expects that the experience of the Chinese state-owned Yujin company, in collaboration with its Nepali partner, will bring international-standard tunnel management experience to Nepal.