Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: The government has decided to build a cut-and-cover tunnel and two flyovers at Koteshwor, Kathmandu’s busiest intersection, to address chronic traffic congestion. The project will move forward with concessional financing from Japan, amounting to nearly NPR 30.8 billion (JPY 34.49 billion).
The decision was endorsed by the Council of Ministers on August 18, paving the way for one of Nepal’s largest infrastructure projects after the Nagdhunga Tunnel. Koteshwor, the main junction connecting Kathmandu, Lalitpur, and Bhaktapur, is notorious for daily traffic jams, making the project a top priority for the government.
Project Details from JICA’s Preliminary Study
According to a preliminary report prepared with assistance from the Japan International Cooperation Agency (JICA), major structures will be built along the stretch between Tinkune and Jadibuti. The Department of Roads stated that final designs will only be confirmed after completion of the Detailed Project Report (DPR).
The JICA study proposes:
A 664-meter flyover from Tinkune to Tribhuvan International Airport (TIA).
A 700-meter cut-and-cover tunnel inside the TIA premises.
A 238-meter flyover from the airport to Jadibuti.
Officials said the project was prioritized because of heavy traffic pressure across all three districts—Kathmandu, Bhaktapur, and Lalitpur.
Still at the Conceptual Stage
“The traffic volume at Koteshwor is overwhelming, so the project naturally became a top priority,” said Arjun Aryal, chief of the Development Assistance Implementation Division at the Department of Roads.
Aryal, however, clarified that while the government has taken an in-principle decision to borrow, the process is only just beginning. “We also learned about the loan decision from media reports. Once the loan agreement is signed between the two governments, the official process will move forward,” he said.
He further added that current proposals are only conceptual, and a detailed survey and design will now determine the final scope. The Department of Roads will handle the entire design, construction, and implementation.
Environmental and Financial Concerns
Though an initial feasibility study has been carried out, the detailed Environmental Impact Assessment (EIA) is still pending. The Ministry of Finance, including its Foreign Aid Coordination Division, claimed they had not yet been officially informed about the loan arrangements.
According to JICA’s proposed timeline:
Loan agreement is expected in September 2025.
Detailed design and tender preparation will run from June 2026 to May 2027.
Construction contract signing is targeted for April 2028.
Completion deadline is August 2033.
Long-Term Impact
Once completed, the project is expected to significantly improve the east-west traffic flow within the Kathmandu Valley, particularly easing congestion in the Tribhuvan International Airport area, one of the Valley’s most critical traffic bottlenecks.
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