Nepal plant project faces delays

Nepal plant project faces delays
28 April 2017

Construction of the Honshu Shivam Cement Factory, a Nepal-China joint venture, is likely to be delayed as the government has been slow to build a road leading to the limestone quarry, the Kathmandu Post reports.

The Honshu Holding Group of China has invested NPR36bn (US$351m) or 70 per cent of the project cost into the venture, while its partners has invested the remainder.

“A study has shown that NPR3bn will be required to construct the 40km road. However, the government has allocated NPR100m for the current fiscal year,” said Shiva Ratna Atal, general manager of the factory.

According to Atal, the company has not been able to transport heavy machinery due to the lack of a proper road. The alternative gravel road cannot be used to transport heavy equipment.

Likewise, a 5km tunnel needs to be built to reach the limestone quarry. Heavy equipment needed to bore the tunnel cannot be brought in as the alternative road is too narrow.

CEO of Investment Board Nepal (IBN), Maha Prasad Adhikari, told the Post that they had taken up the matter with the National Planning Commission and the Ministry of Finance. The government should allocate NPR1.5-2bn in the budget for the upcoming fiscal year to develop the project efficiently, he added.

Meanwhile, the provision of electricity for the plant is proving to be a contentious issue. The government has agreed to provide electricity to the plant directly from the national grid by constructing a substation at Bardaghat in Nawalparasi. The estimated cost of providing electricity to the factory and quarry is NPR500m. However, the Ministry of Industry has allotted NPR30m for the purpose in the budget of the current fiscal year. Moreover, the Nepal Electricity Authority (NEA) has only recently issued a tender notice to erect the transmission line, the report added.

Published under Cement News