Project Concept

TDF has received grant from Asian Development Bank (ADB) and Global Environment Facility (GEF) under Kathmandu Sustainable Urban Transport Project (KSUTP) for financing implementation of the Public Transport in S5 Pilot Route (Gongabu to Sinamangal) and establishment of Sustainable Urban Transport Fund within TDF. TDF shall use the repayment from the new Bus Operating Company to establish Revolving Fund that may be used to finance subsequent public transport sector, which possess huge business potential for TDF in days to come. Hence, this pilot case is consideredas good business opportunity which will pave the way for new business portfolio for TDF in urban public transport sector. Project Area Kathmandu Valley Transport System improvement andurban public transport financing in 2 Pilot Route (S3 &S5). Total Project Cost: US$ 3.8 million (GEF & ADB Grant).

Project Objectives

The main objective of KSUTP is to improve the overall quality of urban life in Kathmandu Valley. The specific
objectives of the project are:
• With the aim of reducing use of private vehicle in future, KSUTP will investigate effective measures to significantly  enhance the existing public transport services by providing more convenient, comfortable, reliable and safe public transport system.
• The project will take effective measures for enhancement of road network operation by improving traffic management and traffic safety in the valley.• The project also aims to declare pedestrianization zones (car free zones) in the Kathmandu City core area. A total of 8 km heritage pedestrian walkways and 15 km of sidewalks improvements are part of the pedestrianization programs;

• Improving air quality monitoring and reduction in air pollution within the Kathmandu City is another objective of the project.
• However, TDF’s involvement in KSUTP is only for financing Public Transport fleet with low emission or electric vehicle through set up of financial mechanism. Under the sub-sector Public Transport, one of the tasks was defined as “Development and implementation of two pilot bus routes using electric or low emission vehicles.” Out of 2 pilot
routes selected for implementation by KSUTP, only Project Highlights S5 pilot route was found viable from operation and business plan prepared KSUTP / PMCBC.

Financing Modality

For development of a financing mechanism through TDF to promote Public Transport fleet renewal by introducing
low emission vehicles under KSUTP, TDF will receive grant amount of US$ 3.8 million (US$ 2 million from
GEF grant account and US$1.8 million from ADB grant financing) to support the pilot routes implementation
and establishment of Revolving Fund within TDF. Project Approval Date: July 22, 2010 (26 Oct. 2010 Signing Date) Jan 05, 2011 (Effectiveness Date) Project Closing Date: June 30, 2018 (Revised) Project Beneficiaries
As per the business plan, the total number of 61 private operators, comprising of 26 micro-bus 25 Safa
Tempo, operating in the S5 Route, had established new operating company, M/s Digo Sarbajanik Yatayat (P)
Ltd., 100% owned by private sector and subsequently, signed Service Level Contract with DoTM for the period
of 12 years. The project will have direct benefit to the local commuters of 15,027 per day and significant impact
on improved urban environment due to promotion of low emission vehicles. Most importantly, it will help to
abolish existing ‘syndicate’ in Public Transport, which is seen as bottleneck for improvement of Public Transport.

Expected Output

The specific planned outputs of the projects are as following:
• In Kathmandu, public transport services and walk ability are improved, favoring a modal shift from private vehicles and improving traffic conditions.
• Public transport is improved and upgraded, and Revolving Fund established within TDF for PT financing.
population and urbanization.