MCA-Nepal begins 40km Mahendra Highway upgrade with US-backed investment

KATHMANDU: Nepal has formally commenced the upgradation of a key section of the East-West Highway under the US-supported infrastructure program, marking a major milestone in the country’s push toward modern, resilient, and cost-efficient road networks.

The Millennium Challenge Account Nepal (MCA-Nepal) on Wednesday launched the construction works for the 40-kilometre Dhan Khola–Lamahi stretch in Dang district, a strategically important segment of Nepal’s East-West Highway corridor.

Advanced Road Technology Introduced in Nepal

For the first time in Nepal, the project will deploy modern engineering techniques such as Full Depth Reclamation (FDR) and Superpave asphalt technology—widely used in global infrastructure projects to enhance durability, sustainability, and lifecycle efficiency.

These methods allow the reuse of existing asphalt materials, reduce environmental impact, and create stronger, longer-lasting road surfaces—aligning Nepal’s road construction standards with international best practices in sustainable infrastructure and climate-resilient transport systems.

The upgraded road will be expanded to a 12-meter width, featuring a 7-meter carriageway and 2.5-meter shoulders on both sides, significantly improving traffic flow, safety, and logistics efficiency.

High-Level Political and Diplomatic Backing

Addressing the launch event, Lumbini Province Chief Minister Chet Narayan Acharya described the project as a transformative step for regional development.

“This upgrade will not only improve road safety and reliability but also unlock economic opportunities for local businesses, farmers, and entrepreneurs,” he said, highlighting the highway’s role in connecting production zones to markets.

From the diplomatic front, Scott Urbon emphasized the strategic partnership between Nepal and the United States under the Millennium Challenge Corporation framework.

“This milestone reflects our shared commitment to building high-quality infrastructure that reduces transportation costs, enhances connectivity, and supports sustainable economic growth,” Urbon stated.

Government and Institutional Coordination

Senior officials from Nepal’s infrastructure sector also underlined the project’s alignment with national development priorities.

Sushil Babu Dhakal, Joint Secretary at the Ministry of Physical Infrastructure and Transport Nepal and MCA-Nepal Board Member, noted that MCC-funded projects are designed to complement the government’s broader infrastructure strategy.

MCC Deputy Resident Country Director Sanjay Poudyal highlighted the focus on cost-effective and high-performance infrastructure, while MCA-Nepal Executive Director Khadga Bahadur Bisht reiterated commitments to transparency, efficiency, and quality delivery.

Strategic Importance of the Road Maintenance Project

The road upgrade falls under the Road Maintenance Project, a core component of the MCC Nepal Compact. The initiative aims to reduce transportation costs, improve road quality, and strengthen economic connectivity across Nepal—particularly along the vital East-West Highway, which serves as the backbone of the country’s domestic trade and logistics network.

Economic and Investment Implications

Infrastructure economists view the project as a critical intervention in lowering logistics costs, improving supply chain efficiency, and boosting regional economic integration—key factors for attracting foreign investment and supporting Nepal’s long-term economic growth.

With the adoption of globally recognized construction standards and strong international financing support, the project is also expected to set a benchmark for future public infrastructure development in Nepal.

The commencement of works signals not just the start of a road upgrade, but a broader transition toward modern, resilient, and globally aligned infrastructure systems in Nepal.