Experts caution that timely implementation, effective supervision and coordination among agencies will be key to ensuring project success. Nepal’s road sector has historically faced challenges related to delays, cost overruns and difficult terrain.

The Millennium Challenge Account Nepal (MCA-Nepal) has signed road maintenance and supervision contracts worth USD 23.66 million, marking a major milestone in the implementation of the Millennium Challenge Corporation (MCC) Nepal Compact and reinforcing Nepal’s efforts to modernise key national highways.

The contracts, signed on Tuesday, will support the upgrading and maintenance of critical road corridors, including a major stretch of the East-West Highway and the Narayanghat–Muglin road, two of the country’s most heavily used transport routes. Officials say the projects will introduce advanced construction technologies aimed at improving road durability, safety and transport efficiency.

Major Contracts Awarded for East-West Highway Upgrade

Of the total amount, USD 20 million has been awarded to the Sharma–Kumar Joint Venture for the upgrading of the 40-kilometre Dhankhola–Lamahi section of the East-West Highway. The project will use full-depth reclamation and Superpave paving technology, both of which are being applied for the first time at this scale on Nepal’s national highways.

Under the project, the road will be widened to 12 metres, including a 7-metre carriageway and 2.5-metre shoulders on both sides, enhancing traffic flow and road safety. MCA-Nepal officials said the upgrade is expected to significantly improve pavement strength and reduce long-term maintenance costs.

The East-West Highway serves as Nepal’s primary transport artery, linking major commercial centres and facilitating domestic and cross-border trade. Improvements to this corridor are expected to lower vehicle operating costs and reduce travel time for freight and passenger vehicles.

Consultancy Contract for Supervision and Maintenance

In addition to the construction contract, MCA-Nepal signed a USD 3.66 million consultancy agreement with Intercontinental Consultants and Technocrats Pvt Ltd (ICT). The firm will provide supervision services for the Dhankhola–Lamahi upgrade and oversee periodic maintenance works on the Narayanghat–Muglin road.

The Narayanghat–Muglin section is one of Nepal’s most congested and strategically important road segments, connecting the capital with western Nepal and serving as a gateway for trade with India. Regular maintenance under the MCC Compact is expected to enhance road performance and improve year-round connectivity, particularly during the monsoon season.

Advanced Road Technology to Improve Durability and Safety

According to MCA-Nepal, the use of full-depth reclamation will allow existing road materials to be recycled into a new base layer, reducing environmental impact while strengthening the pavement structure. Superpave technology, meanwhile, enables asphalt mixes to be designed based on traffic load and climate conditions, improving resistance to cracking and deformation.

Officials said these technologies are expected to extend the lifespan of Nepal’s highways, reduce frequent repair needs and enhance road safety for users. The projects also aim to support Nepal’s broader infrastructure development goals by adopting international best practices in road engineering.

Strengthening Nepal-US Infrastructure Partnership

The contracts were signed in the presence of senior government officials, MCA-Nepal representatives and members of the diplomatic community. Speaking at the signing ceremony, US Ambassador to Nepal Dean Thompson said the agreements reflect the strength of the Nepal–United States development partnership under the MCC Compact.

He said the road projects would deliver tangible benefits to the Nepali people by improving connectivity, supporting economic growth and strengthening trade corridors. MCA-Nepal Executive Director Khadga Bahadur Bisht highlighted that the projects are aligned with the compact’s objective of reducing transport costs and promoting inclusive economic development.

The MCC Nepal Compact, which includes road maintenance and electricity transmission components, is designed to improve infrastructure reliability and create conditions for long-term economic growth.

Economic Impact and Implementation Challenges

Transport economists say improved highway conditions can have a multiplier effect on the economy by facilitating smoother movement of goods, supporting agricultural supply chains and boosting tourism. With road transport accounting for the majority of freight movement in Nepal, infrastructure upgrades are seen as critical to improving national competitiveness.

However, experts also caution that timely implementation, effective supervision and coordination among agencies will be key to ensuring project success. Nepal’s road sector has historically faced challenges related to delays, cost overruns and difficult terrain.

MCA-Nepal has said it will closely monitor project implementation to ensure compliance with technical standards, timelines and environmental safeguards.