Fast Track EIA suggests 10pc environmental bond MoPIT has sent the report to MoSTE for feedback

Fast Track EIA suggests 10pc environmental bond

MoPIT has sent the report to MoSTE for feedback

7 June 2015| The Himalayan Times

KATHMANDU, JUN 6: The environmental impact assessment (EIA) of Kathmandu-Tarai Fast Track road has suggested fixing an ‘environmental bond’ of 10 per cent of total project cost. The EIA report has underlined the need for such a provision in a bid to ensure good security for environmental performance from the project developer. The Ministry of Physical Infrastructure and Transport (MoPIT) has submitted the report to the Ministry of Science, Technology and Environment (MoSTE) seeking the latter’s comments.The project has moved to the next level of development with the preparation of the report, paving the way for the concession agreement to be signed and start construction. EIA, which includes EMAP, is a must to sign the concession agreement and construction of the expressway. For long, the government has been planning to build the expressway under the build, own, operate and transfer (BOOT) modality. Under the BOOT Act, the contractor or developer will be required to implement the environmental management action plan (EMAP) to full extent. Normally, it is common in construction contracts to recommend penalties linked to environmental performance.

However, the option is not open in the BOOT modality. Therefore, the report has recommended setting up an environmental bond as security for good environmental performance by the BOOT concessionaire or contractor during implementation of the EMAP. The bond would provide security in case the concessionaire fails to perform to fully implement the EMAP. As per the EIA report, the expressway will require more than five hectares of forest to be cleared in the alignment and resettlement of people in certain areas of four districts, namely, Kathmandu, Lalitpur, Makawanpur and Bara. The existing BOOT law has provision to set up a ‘bid bond’ for security set at 0.1 per cent of the cost estimate of the project. However this scale of bond amount would not be sufficient to provide security for the environmental bond.

“Experience suggests that environmental mitigation for large infrastructure projects is typically about five to 10 per cent of project cost, therefore it is suggested to consider an environmental bond of 10 per cent of the total project cost,” the report saysThe EIA, including the EMAP, should be used as a basis for an environmental compliance programme and has to be included in the contract documentation. The EMAP shall be reviewed during the detailed design stage. “We will incorporate the feedback of MoSTE and again submit the report for final approval,” said Satayandra Shakya, chief of the Fast Track Road Project. He said that there would also be review in the final report, if there are any changes in the alignment compared to the feasibility study of 2008. The 76-km Fast Track road connecting the Capital with Nijgadh is expected to cost more than Rs 100 billion. A consortium of Infrastructure Leasing and Financial Services (IL&FS) Transportation Networks, IL&FS Engineering and Construction, and Suryavir Infrastructure Construction is preparing the detailed project report (DPR) of the Fast Track.As per the agreement reached between MoPIT and the IL&FS, the DPR study will have to be completed and submitted within mid-July.