Kathmandu: Despite the government’s earlier plans to open the Nagdhunga Tunnel Road before Dashain to ease festive traffic congestion, the project has faced delays due to a lack of approval from the Japanese side.
According to officials, the Japanese construction company responsible for the project has demanded compensation, citing multiple reasons — including obstruction from local residents and the rising value of the US dollar. As a result, the tunnel’s operation has been postponed until mid-January (Poush 17), though authorities are now preparing to open bidding for its operation before the Tihar festival.
Approval Delay and Pending Handover
The Ministry of Physical Infrastructure and Transport had instructed the Department of Roads and the contractor to open the tunnel for trial operation during Dashain. Test runs were conducted on the tunnel and flyover, and the government had planned to allow vehicles to pass through temporarily.
However, the Japan International Cooperation Agency (JICA) and the Japanese contractor refused to grant operation approval, citing that the project was not yet fully complete.
Project Chief Soujanya Nepal stated that the Japanese government has not yet officially handed over the project to Nepal, and some security-sensitive tasks remain unfinished. He also mentioned that landslide control work at the tunnel’s western portal has been halted due to heavy rainfall, making it unsafe to open at this stage.
Japanese Contractor Seeks Compensation
The Japanese company Hazama Ando Corporation, which is constructing the tunnel, has demanded compensation for various reasons.
According to Project Chief Nepal, the company has cited design changes, local obstructions, and the rise in the US dollar exchange rate as grounds for its claim.
While there are rumors of compensation claims amounting to nearly NPR 3 billion, the figure has not been officially confirmed. The government, however, has not accepted these claims.
Engineer Ramesh Prasad Koirala, a project consultant, explained that the claim is related to exchange rate fluctuations and inflation, which increased the cost of construction materials.
“When the project began, the dollar rate was around Rs. 111, and now it’s Rs. 140–141,” he said. “The contract includes provisions for cost adjustments in long-term projects.”
Earlier, the contractor had already claimed NPR 900 million in compensation during the COVID-19 period, citing delays due to lockdowns, site clearance issues, and customs-related problems.
Construction Progress and Remaining Work
The project has achieved 95.5% physical progress so far. Two tunnels — the main tunnel and a rescue tunnel — have been completed. The tunnel stretches from Sisneri in Dhading to Nagdhunga in Kathmandu, with the main tunnel measuring 2,688 meters and the rescue tunnel 2,557 meters.
Remaining work includes landslide control on the western portal, testing, and construction of toll booths.
Originally, the tunnel was scheduled for completion by April 2023 (Baisakh 2080). The deadline was later extended to April 2024 (Baisakh 2081), and then again to October 25, 2025 (Kartik 8, 2082) — the project’s final completion deadline.
Although the physical work is expected to conclude by Kartik 8, official operation is now planned from Poush 17 (around January 1, 2026). Preparations are underway to open bids for private operation before Tihar.
Project Background and Funding
Construction of the Nagdhunga Tunnel began in November 2019 (Kartik 2076) with a total estimated cost of NPR 23 billion.
Of this, NPR 17.15 billion was financed through a concessional loan from JICA, while the remaining cost was to be covered by the Government of Nepal. Due to increased expenses, an additional NPR 5.27 billion in loans was later acquired.
When Will It Finally Open?
Even though the final construction deadline is approaching, the tunnel will not open immediately after completion. According to Project Chief Nepal, the operation contract will be awarded to a private company through open competition, as the system requires specialized knowledge and technology.
A new Public Procurement Directive 2082 has already been issued for this purpose.
“The tender process will be opened before Tihar,” said Nepal. “We are in the final stage of completing all necessary procedures. The tunnel will open only after all security-sensitive work is finalized.”
