Construction Industry In Nepal 3a188

Construction Industry in Nepal Industrial Achievements Abstract Nepal is a land-locked, rugged topography country situated between China and India. Till 1950, the country was isolated from the rest of the world. Means of transportation and communication did not exist. After the commencement of First Five Year Development Plan (1956), Nepal's planned economic development started. This is the period of Tenth Five Years Development Plan but the success in hand is very negligible in agricultural and industrial development. It has a population of about 23.21 million with annual population growth rate of 2.24 percent, and literacy rate of 48 percent. Almost 90 percent of the population lives in the rural areas and most of them depend upon agricultural sector. This sector provides around 40 percent contribution to GDP. On the other hand, due to lack of appropriate policy, plans, stable political environment, infrastructures, technology and adequate investment, the industrial sector remains still at infant stage. It provides very negligible contribution to GDP and employment opportunity. In the last two decade there has been considerable progress in the construction industry. During the period the Nepalese contractors have been able to develop their management skill, improve working capacity, financial and technical capabilities, and acquire suitable construction equipments. As a result local contractors have been able to compete and participate in mega construction project. Basically this article tries to explore the development of construction industry in Nepal; identify challenges faced by the contractors as well as the prospect of construction industry building new Nepal. Background Physical infrastructure development is the major tools that led to prosperous and developed nations. National infrastructure system must be connected through global and regional links if countries are to benefit from the expansion of markets and trade through globalization. Infrastructure development offers the foundation on which a country can seize and capitalize on the opportunities ushered in by globalization and regional integration. Investments on large scale infrastructures are critical to enable a country to achieve long term growth and sustainable poverty reduction. It played an important role in enabling the poor to participate in the growth process. Access to education and health which are also the indicators of economic development, can be vastly improved through better road, electricity, communications, water supply, and sanitation services. The countries like China, Korea and other middle-east countries of Asia raise their economic status by investing large amount on such infrastructures. In Nepal, there is significant need for modernizing the agriculture by irrigation, revitalizing rural economies and creating jobs. Infrastructure development by enlarging markets and increasing factor mobility, will contribute to employment generation, which is a key to ensuring inclusive growth. Nepal is rich in natural resources. It is second richest country and possesses about 2.27 percent of world's water resource. The national utilization of water resource is around 5 percentages in irrigation and 0.8

percentages in hydropower. The length of the road network covers 17,297KM around the country including only 4,918 KM black topped. Regarding this present situation, there is possibility to reap the benefit from the investment on such huge infrastructures. Nepal can also reap the benefits by building the various transit points between China and India. On the other hand, the Nepalese construction industry which is still regarded as in infant stage, can play a vital role to uplift the economic and socio status of local people by developing such infrastructures. Present political situation is a positive sign of the start of systematic long term planning and foreign as well as domestic private investment on such sectors. This development has also indicated that there is a wide opportunity for the local contractors in infrastructures building. In addition this has been a challenge for local contractors to enhance their capability to take the responsibility of meeting this target. Construction Industry in Nepal 1. Public institutions require to establish a procurement unit or specify the responsibility to undertake procurement related activities. 2. Provision for review of procurement process/decision 3. Preference will be given to the t venture between foreign contractor and Nepalese contractors 4. Provision for variation order 5. Provision for price adjustment( Price escalation) 6. Provision for extension of contract duration Nepalese Construction Industry contributed around 10 to 11 percentages to GDP and it uses around 35 percent of government budget. It is estimated that this sector is creating employment opportunities to about one million people so it generate employment next to agricultural sector in the country. Similarly about 60 percentages of the nation's development budget is spent through the use of contractors. From this, it is clearly seen that construction is a major sector and any productivity enhancement activity in this sector will have a positive impact in the overall improvement of the national economy. The first attempt was made in the name of 'Banaune Adda' or construction bureau, in 1769. During the Rana Regime (1846 – 1951) which was extended its departments to the various parts of the country. It maintained the royal palace, government buildings, and undertook new construction works. In this period, there was 'Public Works Madhes Pahad Report Niksari Adda' (PWMPRNA), whose office was at Bhadrakali of Kathmandu. This looked after construction works outside the Kathmandu Valley. Likewise construction works in the Kathmandu valley were controlled by 'Sardar Public Niksari Adda' or the Central Public Works Bureau. In 1934, a new department Jana Seva Bibhag or public Service Department was set up to perform the civic works, tasks of municipalities: water supply, sewerage, street roads, lighting etc. in municipal towns. The Rana regime lasted till 1951 when it was replaced by a democratic government. In the same time, the Ministry of Transport was formed and it was responsible for construction works.

The first engineering structure to be built in Nepal was an iron bridge over river Bagmati in 1850. The first public water supply system was laid in Kathmandu valley during 1888- 95. The royal palace, the clock tower and the suspension bridge on the river in Kathmandu were built during these years. The first hydro-electric project at Pharphing was completed in 1911. The Raxaul-Amlekhganj Railway line by M/s Martin and Co. Ltd of Calcutta and DhursinghMatatirtha Ropeway by M/s Keyner Son and Co. of London, were constructed in 1926-27. Other public construction works were done departmentally by the central government. The new age of the Nepalese construction industry started only after 1951. The First Five Years Development Plan was started in 1956. After that, construction activities in the country boost up automatically. The Industrial Resolution, 1957 adopted by the government of Nepal declared construction as the 'Priority Sector' industry. As the priority sector, construction firms enjoy income tax holiday along with other tax concessions for seven years from the date of incorporation, a more liberal depreciation rate, capitalization of pre investment expenditure, provision of foreign exchange facilities etc. The first act which defined 'Contractor' was The Industrial Enterprises Act, 1974. It made provision for the classification and registration of contractors. According to this act all construction firms must themselves with the Ministry of Works and Transport in class A, B or C, contractors depending upon the technical manpower, value and number of works done, machinery and liquid assets available. Some construction projects like 'Siddhartha Highway', 'Trishuli hydro power', and 'East-West Highway' etc. were started in Nepal which were handled by Nepalese contractors for the first time. After the completion of these projects, Nepalese contractors began to appear all over the country and started to take part in the development work. They developed their capital, managerial skill and equipment simultaneously. Till then construction act had not come into existence so Nepalese construction industry could not develop so much as it should have been in the period of Panchayat system. After the restoration of the parliamentary democracy in 1989, Nepalese contractors got some favorable condition to develop their capacity and got opportunities to take part in several construction projects. Nepalese contractors then came in position to do all kinds of national construction works as roads, buildings, dams etc. except mega projects. Institutional

Development

of

Nepalese

Contractors

Nepalese contractors who are relatively established today started their profession with their own effort without any help, guidance or training were trying to establish their representative organization before two decades or more. It was very difficult to establish such association during the party-less political system (1960-1990). This sector is contributing around 10 percent to the Gross Domestic Product (GDP) of the country after the agriculture, the second largest employer of the country that provides employment opportunity not only to the unemployed but also to the underemployed and to the seasonal workers. Similarly, about 60 percent of the nation's development budget is spent through this season. In spite of this, the effort from the government side to this sector was very limited only to extend of classifying the contractors to different classes and renewing their licenses annually.

After the restoration of multiparty democratic political system in 1990 the need of uniting the contractors for their enlistment and developing further professional skills was very much felt among the contractors themselves and accordingly the Contractors' Associations of Nepal (CAN) was born in 1990. The objectives & the structure of the association had been felt to extend due to the exposition of the development works & its burden to the Nepalese contractors. With the great enthusiasm of all the Contractors Associations of Nepal to be under a single forum, name and structure of this association has been changed as Federation of Contractors' Associations of Nepal (FCAN) in 1997. Now it has five regional and 75 district association as a general member and 253 construction companies as associate member. On the other hand, realizing the need for enhancement of the construction industry, Construction Business Act 2055 was promulgated and came into force from Baisakh 1, 2056 (April 14, 1999). This is an effort made to institutionalize and systematize the construction sector. The act has defined the procedures and requirements relating to issues and renew of license and classification of and obligations of construction entrepreneurs. The act has established Construction Business Development Council (CBDC) under the chairpersonship of Minister for Physical Planning and Works and Construction Business Development & Implementation Committee (CBDIC) under the chairpersonship of t Secretary (technical) designated by the Ministry for Physical Planning and Works. These both are regarded as the apex institutions to develop the Nepalese construction industry. Establishment of the CBDC and CBDIC is the important step taken by the government to promote construction industry of the country. Classification

of

Construction

Company

The licensing and classification of contractors came into practice after implementation of the Construction Classification Regulation in 1975. There were twice amendment of the regulation in 1994 and 1999. The contractors' category and their 1975 and 1999 are presented in the Table 1. The number of construction has also been gradually increasing as shown in Table 2. Table

1.

Bidding Limit by Classification (Rs in Million) Classification Build Limit (1974) Build Limit (1999) Class A Above 10 Above 20 Class B Up to 10 Up to 20 Class C Up to 3 Up to 6 Class D Up to 1 Up to 3 Table Bidding Limit by Classification (Rs in Million)

1.

Yeas 1977 1987 1997 2008

Class A 4 25 112 173

Class B 14 210 84 337

Class C 29 575 938 1328

Class D 47 810 1124 10,268

Total 94 1620 2258 12122

One of the important bases for the contractor's classification is the equipment possession by the contractor. The present classification regulations mostly cater for the civil contractors. Although the contractor may only specialize in building works or electrical or mechanical works, the basis of the ecumenist possession should be timely updated based on the work-specialty of the contractor in his class. There is no defined appropriate measure to evaluate financial ability of the contractor. To insure the financial ability, it may be necessary to establish a requisite of an original copy of the standard financial statement of at least past three months obtained from the concerned bank or set some special parameter of the financial aspect for the evaluation of grading purposes of the company. Structure

of

Construction

Business

Development

Council

(CBDC)

According to Construction Business Act 2055 the composition of the CBDC is as follows: Minister for Works and Transport Chairperson Member of National Planning Commission Member Secretary, Ministry for Works and Transport Member Secretary, Ministry for Housing and Physical Planning Member Chairperson, Federation of Contractors Association Member Chairperson, Society of Consulting Architecture and Engineering Member Firms Nepal t Secretary (Technical) designated by the Ministry for Works Member– and Transport Secretary Structure of Construction Business Development & Implementation Committee (CBDIC) According to Construction Business Act 2055 the composition of the CBDIC is as follows: 1. t secretary (Technical) designated by the Ministry for Chairperson Works and Transport 2. Representative (Technical), Ministry for Water Resources Member 3. Representative (Technical), Ministry for Housing and Physical Member Planning 4. Representative (Technical), Department of Roads Member 5. Representative, Federation of Contractors' Association of Member

Nepal 6. Representative, Society of Consulting Architecture and Member Engineering Firms Nepal Member– 7. Officer designated by the Ministry for Works and Transport Secretary

Role

of

Construction

Industry

in

National

Economy

Construction industry is one of the important sectors in any economy. Its contribution to the GDP and employment is very significant and plays important role in the development of infrastructure that is essential for the development of all other sectors. In Nepal, about 10 percent of the GDP is contributed by the construction sector and is one of the largest employers. It is estimated that this sector is creating employment opportunities to more than one million people in the country. Nepalese Contractors are now saving a huge amount of foreign currency from its flight to abroad by foreign contractors. So it is contributing as export industries to the national economy. Therefore any enhancement made to this sector will have positive impact on the national economy. In developing countries about 60 percent of the national budget is allocated on development works and significant portion of the development budget is allocated to construction sector in Nepal. Challenges

for

Nepalese

Contractors:

After the restoration of parliamentary democracy and implementation of Construction Business Act 2055, new challenges came into existence in Nepalese construction industry. In the mean time government allocated about 60 percent of its budget in the development works in which more than seventy percent of the development budget was invested in construction works. Due to increasing trend of government expenditure in construction work, the construction sector automatically boost up. But still there was various problems regarding public procurement. The major problems arose from the qualification criteria, inflation, autocratic power of the bureaucrats, diversified guidelines of different donor agencies and government agencies, contract documents, appropriate technology, design and planning, project quality performance and delay, cost estimate etc. Lack of one window public procurement policy and adequate protection from government, the construction industry did not take off its pace as it was needed. Meanwhile FCAN made a protest with 14 demands against existing government procurement policy in 2004. There was an agreement between government and FCAN which little bit simplifies the qualification criteria and criteria for t venture between and among the contractors firm/company. Nepal has entered into the global competitive field as it took hip in WTO from the year 2004. This has put a great challenge before the major players of the construction industry of the country. Without any discussion, government es the bill of Public Procurement in the pressure of WTO policies and donor agencies to the parliament in 22 August, 2006. FCAN

realizing unfavorable to Nepalese contractor again made a protest against the bill. After agreement between FCAN and government, the parliament has ed the Bill as Public Procurement Act 2063 in 14 January, 2007 with some amendment. The major features of Public Procurement Act 2063 as are follows: 1. Public institutions require to establish a procurement unit or specify the responsibility to undertake procurement related activities. 2. Provision for review of procurement process/decision 3. Preference will be given to the t venture between foreign contractor and Nepalese contractors 4. Provision for variation order 5. Provision for price adjustment( Price escalation) 6. Provision for extension of contract duration 7. Mechanism for dispute resolution 8. Provision for public notice after completion of procurement agreement 9. Provision of code of conduct 10. Provision for monitoring of procurement work 11. Provision for security while submitting contract document 12. Process of communication 13. Provision for using electronic communication in procurement process There is a debate regarding classification of contractors. The debating article is 10.3 of the act which ignores the existing bidding limit of contractors by classification for the qualification criteria. For effective implementation of this act, regulation seems necessary which is also ed by council of ministry as Public Procurement Regulation 2064. Still there are some unfavorable clauses for local contractors regarding public procurement by group, t venture, qualification criteria etc. There is still lack of basic infrastructure for the development of Nepalese construction industry. The problems being faced by Nepalese contractors will help in understanding the scenario of the industry. Some major problems of the industry are as follows: 1.

Pre-qualification

procedure.

According to the Public Procurement Act-2063, pre-qualification of contractors is necessary for the public work with an estimated amount exceeding NRs. 6 millions. However government does not still have any standard guidelines for the pre-qualification and hence executing agencies develop their own guidelines which differ from project to project and institution to institution. Moreover, still there is lack of standard pre-qualification criteria under the new procurement act. Likewise, for the project funded by international agencies, pre-qualification is still carried out according to their own guidelines. As a result, pre-qualification document will be complex, inappropriate and will be difficult to follow by local contractors to uplift their capacity.

2.

Contract

Documents

In the absence of a balanced and standard bidding document, the documentation normally contains clauses that are favorable to the employer and put the contractors at a greater risk. This in turn affects the overall performance of the project. Many of the foreign-aided projects follow the FIDIC document; whereas the World Bank and Asian Development Bank follow their own documents. The projects funded by Government of Nepal, now follow the Standard Bidding Document (SBD) prepared and implemented by Public Procurement Monitoring Office (PPMO). But still there are some problems relating to price escalation, pre-qualification criteria, t venture etc. These problems create the obstacles to develop the capacity of local contractors specially who have low bidding capacity. Hence, it is interim SBD but very difficult to be acquainted with the contract clauses and contract istration procedure, according to local contractors. The FIDIC and World Bank bidding documents look balanced for both the Client and the Contractor. However, the overall environment of developing country like Nepal does not provide the awareness and necessary to realize practically the real spirit of the document. The contract documents prepared by the World Bank and Asian Development Bank have curtailed some of the facilities that are essential for the contractors of a country like Nepal, where the inflation rate is very high. Hence, the same document can not be effectively implemented in both situations where the inflation rates are very low and where this rate is very high, without appropriate additional clauses. 3. Government Rules and Regulations We found Nepalese construction industry still unorganized in nature. Almost all ed contractors mostly depend on development expenditure of the government. So, timely amendment to the existing laws and regulations are, therefore, necessary for the healthy growth of the industry. The new Procurement Act neglects the bidding capacity of classified contractors. This also made some unsuitable criteria regarding pre-qualification in the side of local contractor. The main problem is related to turnover and experience of contractors in prequalification or post qualification. Nepalese contractor do not have sufficient experience and turnover during the last decade. It is due to less development works in the country. It means political conflict adversely affected the experience of contractors. The procedure of t venture between and among the contractors and other procurement criteria regarding pre-qualification are not defined yet. 4. Construction Equipment and Workshop Shortage of construction equipment and workshop were a problem in the past. The current policy of the government has, to some extent, helped the industry to be equipped with construction equipment. However, the special lists prepared for duty privilege is still not complete. For example, the list has not covered items such as bitumen distributor, tipper trucks, compressors etc. Despite this positive indication, with no guarantee of continuity of work, contractor's poor management ability, and the absence of good and reliable workshops, the contractors experience considerable difficulties procuring and retaining expensive construction equipment. Now the budgetary provision of the government for fiscal year 2066/67, related to high rate of

registration, renewable fee and compulsory provision of vehicle tax for construction equipments, create extra burden to equip Nepalese construction industry. 5. Approval of the Lowest Bid Generally, the contract is awarded to the lowest bidder, even though according to the tender document other factors are also to be considered during the bid evaluation. As a consequence of this unhealthy practice, smaller contractors often reduce their bids to uneconomic levels. This will have negative impact on both quality and duration of the project. It is also to be mentioned here that some foreign contractors also participate in local tender, which is considered unfair by the local contractors. 6. Taxation System The present income tax assessment procedure is non-rational and non- transparent. Furthermore, very often taxpayers are harassed while paying taxes. Even the construction companies do not get any facilities as provided to other industries. The value added tax has not been made clear to the taxpayers which also creating the uncertainly among the contractors. Similarly, there are various other criteria that are not suitable for the construction industry. For example, submitting a monthly report, finding out that a trader is ed on VAT or not etc. 7. Delay in Payment Contractors are not paid on time, in general, for the progress claimed. This creates obstructions in cash flow and the contractor has to supplement funds from external sources with a high interest rate, which in turn affects both the time and quality of construction. These delays, caused by bureaucratic procedures have created real problems. Budgets are not sanctioned in time. In most cases, it takes more than 3 months to access the budget at project level after it has been sanctioned. Sometimes, because of political reasons, projects are formulated and tendered without budget. In addition, the project's major personnel are frequently changed. This also creates problem and difficulties in the project implementation process. When project personnel become acquainted with the project, he/she is frequently transferred and the newcomer will require some time to become acquainted with the project and the surrounding environment. During this period he/she may not be able to make informant and expeditious decisions. Despite such anomalies of the bureaucracy, contractors are often blamed for the problems encountered during the execution of projects. Even when there is not a budget problem, the contractors are at the mercy of the project manager to obtain timely payment. Therefore, a revision from the concerned agencies in this regard will be highly appreciated and such revision will also help in maintaining the cost and time schedule of the project, facilitation contractors in managing their cash flow for the project. 8. Price Change The rate of inflation is very high in the economy. The prices of construction materials vary up to cent percent in short duration of time. In such situation no appropriate policies are made by the government. However, new procurement act made a provision for price escalation when price changes more than 10 percent. This provision is not clear and variation order also depends up on the mood of the government officials. This creates the problems to complete the project efficiently by the contractors. 9. Brain Drain Because of the non-institutionalized nature of the industry, in general, the construction sector in Nepal is facing a shortage of technical manpower. This is exacerbated by many competent

persons seeking employment outside the country. This situation has significantly affected the industry. The manpower which remains in the country also prefers government jobs rather than taking employment in the private sector. 10. Unavailability of Construction Materials The Nepalese contractors are facing the problem arising from unavailability of construction materials in appropriate time. Most of the construction materials are imported from foreign countries through road transport. Political instability in the country causes different types of strikes in different regions. It or sometime external factors create rise in prices of such materials and cost and time of the projects. 10. s Group There is a provision of public procurement by group on Public Procurement Act, and Regulation. D class contractor bidding limit is Rs. 3 million but second amendment of procurement regulation neglects the bidding capacity of contractors and increases the amount from 3.5 millions to 6 millions which can be procured by group. This provision on regulation creates unemployment on local contractor, reduces government revenue, possibility of misuse of the allocated fund, mismanagement of project, low quality etc. 11. WTO and Construction Industry: The country has entered into the global competitive field – the World Trade Organization (WTO) from the year 2004. Nepalese construction industry should follow all provisions of WTO from 2010. This has put a big challenge before the major players of the construction industry of the country. This is because less capacity of Nepalese contractors. Following points are to be considered in this regard: 1. On what ground the existing internal market is attractive for foreign investors and how Nepalese construction can be benefited from such attraction of the foreign parties. 2. How the internal market can be made more attractive to the foreign parties so that large scale projects requiring large fund, high technical and managerial capabilities can be implemented through public private partnership (PPP) with involvement of foreign parties. 3. How capabilities of Nepalese contractors can be enhanced to make them capable to compete in the global market including internal market, which will also be open to foreign competitors. 4. To be benefited from the hip of the WTO, Nepalese construction industry has to act immediately to develop its plan and programs for its preparation to work in WTO environment. After 2010 AD, Nepal should follow all the provisions of WTO even in the construction sector. It is regarded as very fruitful for the big contractors but on the other hand small contractors should be unemployed due to the pressure of foreign and domestic big contractors. Prospects of Nepalese Construction Industry: The remarkable success that China has achieved in reducing poverty over the last two decades is largely due to its massive investments on infrastructure – extending toll roads, irrigation, electricity and improved communications into the more remote west. In India, construction projects employ at least 31 million people of whom more than half are extremely poor migrant workers, and many are unskilled women. Rapidly growing economy like Malaysia, South Korea, South Africa etc. have established their economic status higher by investing huge

construction projects. Nepal is entering into the era of building new Nepal. Development activities need to be increased many folds more than the present pace to achieve inclusive growth with equal opportunity of employment for improved prosperity of the country reducing the poverty. There is positive relationship between development of construction industry and economic development of a country. Thus we can easily trace out the prospects or opportunities of Nepalese construction industry in building infrastructures and achieve the Millennium Development Goal as follows: 1. Roads and Airports: The goal of economic development can only be achieved through the establishment of adequate and efficient transport facilities. Nepal has rugged topography about two third area of the country. Hence, an efficient road network has become a challenge. Likewise Nepal is land locked country. However, an improvement and extension of transportation network provides the opportunities to grow the economy. Nepal is still lacking sufficient road network. If road networks are extended, Nepal can be "Land Linked" between India and China. From which it can reap the benefit of transit point between these countries. Similarly, for tourism industry, which is regarded as one of the major source of foreign currency earning, many infrastructures development in different parts of the country including regional and international airports are the opportunities of the construction industry in Nepal. On the other hand, investment form the government in road sector is low and is not able to meet the requirements of the country and aspirations of the people. Hence, contractors and consultants can and have to play key role in this regard to attract the private sector to make investments in the road sector following the Built, Operate and Transfer (BOT) approach. 2. Irrigation and Hydropower: Nepal is second richest country after Brazil in its water resource and it has the great prospects in generating hydroelectricity and constructing irrigation projects through out the country. Although Nepal has a large reserve of water resources, it is not able to utilize them properly. At the end of FY 2005/06, the total hydropower production was 556.4 MW, which is merely 0.67 percent of the total potentiality of 83,000 MW. Recently, the government has prepared a three years interim plan including 500MW production of hydropower within the plan period. It has been a great opportunity for the Nepalese contractor. In the mean time, India which still lacking the huge amount of power supply, will be the good market for Nepalese hydropower Nepal can earn large amount of money by exporting its power to India. The extension of irrigation facilities in the agricultural land can bring crop integration and crop diversification, which can help to generate employment and reduce poverty. At present only 40 percent of cultivated land is covered by round the year irrigation. If power supply generation and irrigation is possible from the same project, it will be beneficial and cost effective. In this regard, the feasibility studies of such projects are required to develop the Nepalese construction industry. 3. Real state and Housing According to population census 2001, the growth rate of population is 2.24 percent per annum. With the economic development of the country, the tendency or the flow of population is from rural areas to urban areas. It requires better real state, housing, market complex, good hospitals, schools and colleges. Still there are insufficient such facilities in Nepal. Though there are lots of opportunities for local contractor on building real state and housing.

4. Public Private Partnership in infrastructure development The government of Nepal liberalizes its policies after 1980's. Now government has released the act related to Build, Operate, Own and Transfer BOOT Act (PPP) – 2063, Road Sector Policy 1999, BOOT Regulation (PPP) – 2064, Hydropower Act – 1992, Public Infrastructure Build Operate and Transfer Policy – 2057, Private Investment in Infrastructure Build and Operate Ordinance – 2060. There is still some opportunity for the contractors through Contractual PPP’s as:

Build and Transfer (BT) Build, Operate and Transfer (BOT) Build, Operate, Own and Transfer (BOOT) Build Transfer and Operate (BTO) Lease, Operate and Transfer (LOT) Develop, Operate and Transfer (DOT) PPP is regarded as the revolutionary approach towards infrastructure development which pulling in resources, pulling in expertise, maximizing service delivery, magnifying scope opportunities and creates the employment opportunities for the contractors also. The following are regarded as the prospective PPP projects now in Nepal. - Build and Transfer (BT) - Build, Operate and Transfer (BOT) - Build, Operate, Own and Transfer (BOOT) - Build Transfer and Operate (BTO) - Lease, Operate and Transfer (LOT) - Develop, Operate and Transfer (DOT) - PPP is regarded as the revolutionary approach towards infrastructure development which pulling in resources, pulling in expertise, maximizing service delivery, magnifying scope opportunities and creates the employment opportunities for the contractors also. The following are regarded as the prospective PPP projects now in Nepal. - Kathmandu - Terai Fast Track - East-West Railway - Kathmandu-Terai Railway - Kanti Rajpath - Birgunj-Jitpur Roadway - Kathmandu Outer Ring Road - Janakpur-Jayanagar Railway - Sitapaila-Dharke Roadway - Airports- Nijgadh,Pokhara, Bhairahawa - Dry ports - Truck Terminals - Bus Terminals - Cargo Complex at TIA - Cable Car and Ropeway - Road and Infrastructure Maintenance

- Road Intersection - Sky Bridge - Sub Way - Flyovers and Interconnections - City Parkings In conclusion, there is huge task on construction of infrastructure facilities, both basic as well as developmental. Living between the two developing economies giants, who are ed as the future superpower of the World in next two decades, and living at neighborhood of Bhutan, Nepal is still searching and endeavoring to find lasting solution to reduce poverty. Time is rich to learn lessons from the neighboring countries and march ahead for real achievements, which will largely depend upon development projects through construction industry.