Construction Cost of Pushpalal Mid-Hill Highway Increased by NPR 5.1 Billion

The Auditor General’s Office report highlights that delays in the construction of the Pushpalal Mid-Hill Highway have caused the project costs to exceed initial estimates by NPR 5.1 billion. As a national pride project, the total cost of this highway has surged by 152.78 percent, reaching NPR 8.433 billion. With only 82 percent physical progress achieved, challenges such as the absence of a detailed project report and compensation disputes have continually disrupted construction activities.

The Pushpalal Mid-Hill Highway, initiated to connect districts in Nepal’s mid-hill region to the transportation network, has faced cost overruns exceeding NPR 5.1 billion even before completion. This project, linking to the East-West Highway, commenced in fiscal year 2064/65 (2007/08) and was initially targeted for completion in fiscal year 2074/75 (2017/18). The original estimated cost was NPR 3.336 billion; however, the revised cost estimate has escalated to NPR 8.433 billion, according to the Auditor General’s performance audit report.

The report states that incomplete works within the scheduled time frame led to a 152.78 percent increase in costs. By fiscal year 2081/82 (2024/25), NPR 7.09 billion has already been spent. Initially planned to span 1,776 kilometers, the project length has now expanded to 1,879 kilometers due to route realignments, contributing further to cost increases. After years of fluctuations, the Auditor General has directed enhanced efficiency to ensure timely completion of the project moving forward.