Nepal: South Asia Subregional Economic Cooperation Mugling–Pokhara Highway Improvement Phase 1 Project

Sovereign (Public) Project | 52097-002

The project road is the primary access link of Pokhara to Kathmandu and is a major feeder road of two SASEC corridors linking Kathmandu to Dhaka (Bangladesh) and Kolkata (India) through Mugling and the East -West Highway. It is a two-lane carriageway that handles about 7,400 vehicles per day, including 14% of goods vehicles and up to 55% of motorcycles in urban areas. Traffic is forecast to increase to 13,000 vehicles per day by 2040, and the rising number of motorcycles creates significant road safety risks, notably as (i) the road winds through the mid-hill region of Nepal and its geometry can be improved, (ii) slow-moving vehicles and pedestrians are not segregated in urban areas, and (iii) the pavement is in poor condition. The road will be widened to four lanes to cater to increasing demand, and design standards will feature enhanced geometry, pavement, structure, drainage, safety, and intelligent traffic system features to improve sustainability, safety awareness, and safety compliance.

Project Details

Project Name South Asia Subregional Economic Cooperation Mugling–Pokhara Highway Improvement Phase 1 Project
Project Number 52097-002
Country Nepal
Project Status Active
Project Type / Modality of Assistance Loan
Technical Assistance
Source of Funding / Amount
Loan 3846-NEP: South Asia Subregional Economic Cooperation Mugling Pokhara Highway Improvement Phase 1 Project
concessional ordinary capital resources lending / Asian Development Fund US$ 195.00 million
TA 9836-NEP: Enhancing Road Safety, Disaster Risk Reduction, and Project Implementation Capacity
Technical Assistance Special Fund US$ 500,000.00
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Regional integration
Drivers of Change Gender Equity and Mainstreaming
Governance and capacity development
Partnerships
Sector / Subsector

Transport / Road transport (non-urban) - Transport policies and institutional development

Gender Equity and Mainstreaming Some gender elements
Description The project road is the primary access link of Pokhara to Kathmandu and is a major feeder road of two SASEC corridors linking Kathmandu to Dhaka (Bangladesh) and Kolkata (India) through Mugling and the East -West Highway. It is a two-lane carriageway that handles about 7,400 vehicles per day, including 14% of goods vehicles and up to 55% of motorcycles in urban areas. Traffic is forecast to increase to 13,000 vehicles per day by 2040, and the rising number of motorcycles creates significant road safety risks, notably as (i) the road winds through the mid-hill region of Nepal and its geometry can be improved, (ii) slow-moving vehicles and pedestrians are not segregated in urban areas, and (iii) the pavement is in poor condition. The road will be widened to four lanes to cater to increasing demand, and design standards will feature enhanced geometry, pavement, structure, drainage, safety, and intelligent traffic system features to improve sustainability, safety awareness, and safety compliance. The road will be median divided, and service lanes in urban areas will improve safety, particularly for women and children, who are more likely to walk, ride a bicycle, or use public transport than men.
Project Rationale and Linkage to Country/Regional Strategy

Nepal is landlocked and bordered to the north by the People''s Republic of China, and to the south, east, and west by India. Consequently, Nepal relies heavily on its direct neighbors for international trade, mainly India which traded 65% of Nepal's imports and 58% of its exports in fiscal year (FY) 2018. Gross domestic product (GDP) grew by 4.5% annually from FY2008 to FY2018 and at 7.1% in FY2019. However, GDP largely depends on exogenous factors, such as remittances, which accounted for 25.1% of GDP in FY2018; and rainfall, as agriculture accounted for 27% of GDP in FY2018 and employed 69.4% of the labor force in FY2015. Nepal's' economy suffers from a lack of competitiveness and is particularly hampered by its deficient infrastructure network and the resulting high operating costs and travel times, which (i) constrain the development of competitive export supply chains, (ii) hinder the exploitation of its natural resources and tourism potential, and (iii) impede regional integration and trade with indirect neighbors.

Pokhara is the capital of the Gandaki Province and has a population of about 450,000 people in 2019. It is a major economic and social hub for its hinterland, although Pokhara''s location at the foot of the Himalayas impedes connectivity and restricts access to markets, jobs, and social opportunities. The sinuous 200 km journey to Kathmandu takes over 5 hours by road. There are no railway or waterway connections, and its domestic airport handled only 610,000 passengers in 2018. A new regional international airport in Pokhara will alleviate the capacity constraints of the existing airport and is expected to be completed in 2021. Despite poor transport links, Pokhara''s attractive environment makes it a primary tourism destination, and it welcomed about 376,000 international visitors in 2017 (40% of all international arrivals in Nepal, up from 22% in 2001).

Roads are the predominant mode of transport for more than 90% of goods and passengers, although road density remains low at 47 km of road per 100 square kilometers of land area. The strategic road network totals 12,494 km, 51% of which is paved, and is developed and maintained by the Department of Roads in the Ministry of Physical Infrastructure and Transport. The number of registered vehicles increased from 0.7 million in FY2009 to 3.2 million in FY2018, and motorcycles accounted for 79.6% of sales. Vehicle registrations are expected to quadruple by 2029, highlighting the need to increase capacity. The high traffic fatality rate of 15.9 fatalities per 100,000 people also mandates road safety improvements, notably by strengthening road designs. The strategic road network maintenance budget increased by 10.0% annually and in real terms during FY2013 -FY2020; however, the average budget utilization of 81% requires improvements in asset management and planning practices. International and domestic air travel increased by 7.2% and 2.0% annually during 2011 -2018, but capacity constraints at Kathmandu airport inhibit growth.

Impact

Transport connectivity within Nepal and with neighboring countries improved

Physical connectivity and multimodal linkages for land-based transport along major trade routes enhanced

Project Outcome
Description of Outcome Efficiency and safety of the road transport system improved
Progress Toward Outcome Achieving the targets needs full completion of the project.
Implementation Progress
Description of Project Outputs

Road network upgraded and maintained

Awareness of communities and capacity of government staff on road safety, disaster risk reduction, and project implementation improved

Status of Implementation Progress (Outputs, Activities, and Issues) Procurement of 2 civil works contracts ongoing. Selection of construction supervision is ongoing.
Geographical Location Abu Khaireni, Pokhara
Safeguard Categories
Environment B
Involuntary Resettlement A
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects

The proposed road mainly follows the existing road alignment which passes through 26 major streams and 17 community managed forests. Approximately 45% of the road passes through built up areas, 39% through rural and cultivated areas, 9% through forest, 5% through rocky area, and about 2% of the alignment through barren land. The entire alignment lies outside any biodiversity conservation site, environmentally sensitive area or any protected or buffer zone.

Anticipated environmental impacts include siltation of waterways, erosion of cut portions, particularly along hilly areas, and vegetation clearance. The rest of the impacts identified in the disclosed IEE are typical of road construction and will be mainly restricted to the construction stage with no expected irreversible impacts. Mitigation measures have been identified and summarized in the EMP which forms part of bid documents and will be included in the final contract agreement.

The project road requires an IEE clearance from MOPIT. Approval of the IEE for the road will be secured by the DOR PIU before the start of construction works.

Involuntary Resettlement

Land acquisition and resettlement impacts are expected to be limited as the project is developed in the current right-of-way of DOR.

The project will require land acquisition of private land where the existing alignment is insufficient to meet the requirements of the new design, usually for intersection improvements and bridges. The land to be acquired mostly comprise small strips of uncultivated and cultivated land on either side of the existing road. A total of 143 private land parcels equivalent to 1.28 hectares and belonging to 122 households will be affected. Almost all of the impacted households (810 households accounting for 3,985 persons) are affected because of structures within the rightof-way. A total of 767 structures belonging to 810 households will be affected, most of them (85%) belonging to non-titled holders. Only 0.074 hectares of land of paddy crops are expected to be affected, representing an annual production of about 400 kilograms. There are no major impacts on the income of affected households due to the loss of land. Resettlement plan information will be updated according to circumstances and will be reported to ADB.

Indigenous Peoples There are no indigenous people in the project area.
Stakeholder Communication, Participation, and Consultation
During Project Design Consultations were held with affected persons and other concerned stakeholders during the preparation of the poverty and social analysis and resettlement plan.
During Project Implementation Consultation, as required, will be carried out during project implementation.
Business Opportunities
Consulting Services All consultants and nongovernment organizations will be recruited according to ADB''s Procurement Regulations (2017, as amended from time to time). All firms will be recruited using ADB's quality- and-cost-based selection (QCBS) under full technical proposal (FTP) and a standard quality -cost ratio of 90:10.
Procurement All procurement of goods and works will be undertaken in accordance with ADB''s Procurement Policy (2017, as amended from time to time) and Procurement Regulations for ADB Borrowers (2017, as amended from time to time). Open competitive bidding (OCB) procedures will be used for all civil works contracts with provision for domestic preference. Requests for quotations will be used for procurement of works and goods estimated to cost less than $100,000.
Responsible ADB Officer Chong, Sin Wai
Responsible ADB Department South Asia Department
Responsible ADB Division Transport and Communications Division, SARD
Executing Agencies
Ministry of Physical Infrastructure and Transport
Mr. H.L. Regmi
[email protected]
Singha Durbar
Kathmandu
Nepal
Project Directorate (ADB) - Department of Roads
Mr. O.H. Halls
[email protected]
Bishalnagar, Kathmandu
Nepal
Timetable
Concept Clearance 12 Jun 2019
Fact Finding 27 May 2019 to 11 Jun 2019
MRM 17 Jul 2019
Approval 29 Oct 2019
Last Review Mission -
Last PDS Update 25 Nov 2020

Loan 3846-NEP

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
29 Oct 2019 10 Dec 2019 31 Jan 2020 30 Jun 2026 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 254.00 Cumulative Contract Awards
ADB 195.00 07 Sep 2021 96.82 0.00 50%
Counterpart 59.00 Cumulative Disbursements
Cofinancing 0.00 07 Sep 2021 10.44 0.00 5%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - Unsatisfactory - - - -

TA 9836-NEP

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
29 Oct 2019 21 Nov 2019 21 Nov 2019 31 Dec 2022 - -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
500,000.00 0.00 0.00 0.00 0.00 0.00 500,000.00 07 Sep 2021 161,370.00
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - Unsatisfactory - - - -

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

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Safeguard Documents See also: Safeguards
Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.


Evaluation Documents See also: Independent Evaluation

None currently available.


Related Publications

None currently available.


The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

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Contracts Awarded

Contract Title Approval Number Contract Date Contractor Contractor Address Executing Agency Contract Description Total Contract Amount (US$) Contract Amount Financed by ADB (US$)
UPGRADING OF MUGLING-ANBUKHAIRENI-POKHARA ROAD(SEC TION 2) TO 4-LANES,SERVICE LANES,STRUCTURES,BRIDGE S,ETC. AND MAINTENANCE WORKS. Loan 3846 25 May 2021 ANHUI KAIYUAN HIGHWAY AND BRIDGE CO. LTD. NO.17, TIANZHI ROADS, HIGH-TECH ZONE, HEFEI CITY, ANHUI PROVINCE, CHINA, PEOPLE'S REP. OF Ministry of Physical Infrastructure and Transport CONSTRUCTION 63475910.64 52003838.39
Abukhaireni-Pokhara Highway-Upgrading of existing road from 2-lanes to 4 lanes and sercie lanes, str uctures, bridges, etc. and Maintenance works Loan 3846 04 Feb 2021 China Communications Construction Company Ltd Building A, No. 85, Deshengmenwai Street Beijing, CHINA, PEOPLE'S REP. OF Ministry of Physical Infrastructure and Transport CONSTRUCTION 53171748.35 41246393.27
Capacity Development Technical Assistance 9836 14 Oct 2020 CDM International Inc. USA(UNITED STATES) in association with ITECO Nepal (P) Ltd.(NEPAL) 75 State Street, Suite 701 Boston, MA 02 United States Ministry of Physical Infrastructure and Transport 497228