Nagdhunga Tunnel Operation Contract Awarded to Chinese Joint Venture Company

The Government of Nepal has moved a step closer to bringing the Nagdhunga Tunnel Project into service after awarding the operation and maintenance contract to a joint venture involving a Chinese company, despite reported concerns from Japan, which provided concessional loan financing for the project.

The Department of Roads under the Ministry of Physical Infrastructure and Transport said in a notice on Monday, March 30, that Yuxin–A.R.T Joint Venture has been selected as the successful bidder to operate and manage the 2.7-kilometre tunnel, designed to ease congestion at Kathmandu’s western entry point.

According to the department, the company emerged as the lowest financial bidder among firms that passed the technical evaluation stage.

Officials said 10 bidders participated in the process, of which seven joint ventures—comprising six Chinese companies and one Indian company partnered with Nepali firms—were found technically qualified. The government had invited foreign operators in partnership with local companies, citing Nepal’s limited experience in operating tunnel roads.

The selected operator will be responsible for the tunnel’s operation and maintenance once the contract is signed. The Department of Roads has given the company one week to complete the agreement process.

Construction of the project began on October 21, 2019.

Once operational, authorities say the tunnel is expected to cut travel time through the Nagdhunga section from 30–45 minutes to about seven minutes, easing congestion at a key entry point to Kathmandu. It is also expected to reduce fuel consumption, vehicle operating costs and emissions.