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Nepal’s Nagdhunga Tunnel, a six-year-old infrastructure project aimed at reducing congestion and cutting travel time near Thankot, is finally set to open - under the operation of a Chinese company.

The Department of Roads (DoR) has selected China-based Yuxin-ART JV to manage and operate the tunnel, which was built with support from the Japan International Cooperation Agency (JICA). According to Sanjay Panthi, Deputy Secretary of the Nagdhunga Tunnel Project, the company has committed to paying the government Rs 1.10 billion over five years.

Among the international bidders, six Indian companies and one Chinese firm were shortlisted, with the latter ultimately winning the tender. Panthi said commercial operations are expected to begin from mid-June, following a three-month trial period.

Although construction was largely completed nearly a year ago, the tunnel has remained closed due to administrative delays and procedural issues. Panthi added that Nepali law requires the foreign operator to partner with a Nepali company.

A Ministry of Physical Infrastructure and Transport (MoPIT) engineer noted that although 90 percent of a project is typically considered complete, the Nagdhunga Tunnel reached that milestone 8–9 months ago but remains unopened. The project, initiated six years ago, was designed to ease traffic and shorten the journey from Balambu to Sisne Khola from 7.5 km to 5 km, saving drivers hours of congestion.

The government had initially planned to open the tunnel during Dashain, then the English New Year, and later Nepali New Year 2083 BS (April 14, 2026), but none of these deadlines were met. The extended timeline was partly due to JICA’s recommendation against selecting a Chinese firm and its caution against companies blacklisted internationally.

The DoR had also faced challenges in choosing a service provider, with tender deadlines extended multiple times - from December 17 and 31, 2025 to mid-January 2026. A senior DoR official said, “We are working according to our laws, because our priority is our legal framework.”

The Tunnel Operation and Management Procedure, approved in October 2025, lays out the responsibilities for operating, managing, and maintaining the tunnel. MoPIT officials said Nepal’s lack of prior experience with tunnel operations contributed to delays. “Now that we have experience, future tunnels will not face such delays,” a senior official said.

Initially, the Kathmandu Road Division considered operating the tunnel directly, but it became clear that at least 120 permanent staff would be required. Recruiting and managing such a workforce proved complicated, making a service provider company the only viable option.

Once operational, vehicles will no longer be stuck for hours at Thankot/Nagdhunga, and the journey will take roughly 30 minutes. Toll fees are proposed to range from Rs 50 for small vehicles to Rs 500 for large trucks, while motorcycles and vehicles carrying flammable fuel will be prohibited. The toll-collecting company will also be responsible for essential services inside the tunnel, including ventilation, fire control, security, communication, and electricity.

MoPIT officials stressed that this is Nepal’s first tunnel operation, and the lessons learned will make future projects easier. “We are learning from this experience,” said one official.

By Bhuwan Sharma