Milestone in Public Transport Financing

The Executive Director of Town Development Fund (TDF), Mr. Maniram Singh Mahat, signed a loan and grant agreement with Digo Sarbajanik Yatayat (P) Ltd. The private sector bus operating company, on 16th November 2017 amidst a function held in the office of TDF, New Baneshwore, in the presence of representatives of Kathmandu Sustainable Urban Transport Project (KSUTP/PMCO), Department of Transport Management (DoTM) and Asian Development Bank ADB/NRM.

Kathmandu Sustainable Urban Transport Project (KSUTP) was launched as a pilot project by the Government of Nepal (GoN) with financial assistance from the Asian Development Bank (ADB) in 2010, with the main objective to improve the overall quality of urban life in Kathmandu Valley, including improvement of public transport.

KSUTP has 4 project components, namely, Public Transport Component, Traffic Management, Walkability Improvement and Air Quality Monitoring. Under the Public Transport Component rigorous exercise was carried out for re-structuring the existing bus routenetwork for implementation of bus service franchising to promote performance ofpublic transportas a viable alternative by formalization of individual operation into a Company. Accordingly, 2 pilot routes were selected for implementation and development of a financing mechanism through TDF to promote PT fleet renewal by introducing low emission or electric vehicles.
Out of the 2 Pilot Routes selected for implementation, S5 Pilot Route (New Bas Park Sinamangal) found viable for implementation, where 26 Micro Bus and 35 Safa Tempos were previously operating and all the vehicle owners cooperated to be replaced by fleet of 17 buses and established a Company, M/s Digo Sarbajanik Yatayat (P) Ltd. in September 2017.

Under the project, ADB and GEF grant will be utilized by TDF for financing the fleet and establishment of Sustainable Urban Transport Fund within TDF. A Memorandum of Understanding (MoU) was signed between Ministry of Physical Infrastructure and Transport (MoPIT) for Utilization of ADB and GEF Grant for Implementation of the Kathmandu Sustainable Transport Project Pilot Routes in the Kathmandu Valley on 28 May 2017. Consequently, Service Level Contract was signed between Department of Transport Management (DoTM) and M/s Digo Sarbajanik Yatayat (P) Ltd., the Bus Operator Company, on 17 September 2017.

The current situation of public transport in the Kathmandu Valley is very inefficient because of complex route and high numbers of small & low-capacity vehicles operating such as Tempos & Micro-buses operating line and haul services resulting increased traffic congestion and environmental pollution.

The expected benefit from financing new fleet of 17 buses in S5 Pilot Route will demonstrate feasibility with restructures pilot route, improved level of services, replacing tempos and buses with low emission vehicles by directing benefiting about 15,000 commuters per day. And most importantly, it will be the milestone in Formalization of individual operation into a Company.