KATHMANDU: The government has selected a Chinese company to operate and manage the Nagdhunga–Sisnekhola Tunnel, Nepal’s first road tunnel, which is nearing completion after years of construction delays.
The decision comes more than five years after construction of the tunnel project began on November 4, 2019. The project was awarded to Japanese contractor Hazama Ando Corporation with financial support from the Japan International Cooperation Agency (JICA).
The tunnel is being built with a concessional Japanese loan worth around Rs 16 billion, along with an additional Rs 6 billion investment from the government.
Originally, the project was scheduled to be completed within three and a half years. However, the deadline has been extended four times, and even after five and a half years of construction, around two percent of the work remains unfinished.
According to the latest agreement, the contractor must complete the remaining work and hand over the project to the government by mid-April.
Earlier, former Prime Minister KP Sharma Oli had announced that the tunnel would be operational starting from the English New Year 2026. However, disputes over who would operate the tunnel delayed the final decision despite construction nearing completion.
Chinese–Nepali JV selected
Amid the dispute, the government on Monday announced that a Chinese–Nepali joint venture offering the lowest bid has been selected to operate the tunnel.
The Nagdhunga Tunnel Construction Project has chosen the Chinese company Yuxin–ART JV to handle the tunnel’s operation and management.
Project Director Saujanya Nepal said a seven-day notice has been issued inviting the selected company to sign the agreement.
“We have published a seven-day notice after selecting Yuxin–ART JV through financial evaluation for the operation of the tunnel in coordination with a Nepali company,” Nepal said. “If no objections are filed, the company will be invited to sign the agreement after the notice period.”
According to him, the company was selected after offering a bid about 40 percent lower than the estimated project cost.
The project had invited national and international companies to apply for the operation contract on November 2, 2025. Out of 10 companies that participated in the procurement process, seven companies qualified for the technical evaluation stage in coordination with Nepali firms.
During the financial evaluation, the Yuxin–ART joint venture emerged as the lowest bidder.
The company has proposed to operate and manage the tunnel for five years at a total cost of Rs 1.10 billion. Based on this agreement, the government will pay around Rs 220 million annually to the operator.
Training Nepali workforce
According to Project Director Nepal, the operating company will train around 150 personnel to manage tunnel operations, including Nepali workers.
“In the first phase, the company will train approximately 150 workers, including Nepali staff, to build technical capacity,” he said.
“The idea is that after five years, Nepali companies themselves will be capable of managing tunnel operations independently.”
The service provider will also conduct training through trial operations once the tunnel becomes operational.
Meanwhile, slope stabilization and landslide control work is ongoing on the western side of the tunnel. The Japanese contractor is currently carrying out that work.
Officials say the construction work is expected to be completed by mid-April, after which the tunnel will undergo trial testing. Full operation is likely to begin around July if everything proceeds according to schedule.
Operational responsibilities
The operating company will be responsible for maintaining safety standards, toll collection, tunnel maintenance, traffic management and emergency rescue services.
Authorities say the tunnel will remain open for vehicles 24 hours a day throughout the year.
The toll revenue collected from vehicles will be deposited into the government’s road fund through the Road Board Nepal, while the financial responsibility for operations will remain with the government.
According to digital traffic projections prepared for the tunnel, approximately 950 vehicles are expected to use the route daily.
However, pedestrians, two-wheelers and three-wheelers will not be allowed inside the tunnel.
Toll charges fixed
The government has already approved toll charges for vehicles using the tunnel.
As per a Cabinet decision taken under former Prime Minister KP Sharma Oli on August 4 last year, vehicles will be required to pay fees ranging from Rs 60 to Rs 600 depending on their type.
Cars and vans will pay Rs 65 when entering Kathmandu and Rs 60 when exiting the city. Minibuses and mini trucks will pay Rs 115 entering Kathmandu and Rs 80 exiting.
Similarly, buses and large trucks will pay Rs 260 when entering Kathmandu and Rs 200 when leaving.
Heavy equipment vehicles will pay Rs 600 entering Kathmandu and Rs 250 when exiting.
Motorbikes and cycles not allowed
According to the government’s operational guideline for the Nagdhunga–Sisnekhola tunnel, pedestrians, bicycles, motorcycles and other non-motorized vehicles will not be permitted.
Vehicles carrying highly flammable or explosive materials such as petrol, diesel or gas will also be restricted from entering the tunnel.
For safety purposes, an emergency tunnel has been built alongside the main tunnel. The main tunnel measures 2,688 meters in length, while the emergency tunnel stretches 2,557 meters.
The Nagdhunga–Sisnekhola tunnel is expected to significantly reduce traffic congestion on the Kathmandu–Naubise road section and improve connectivity between the Kathmandu Valley and the rest of the country.
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