Nepal and China Sign agreement for second phase of Ring Road expansion

The second phase of Kathmandu’s Ring Road expansion has formally moved forward after the signing of an implementation agreement on Wednesday. The agreement was signed at the Ministry of Physical Infrastructure and Transport by Minister Sunil Lamsal and Chinese Ambassador to Nepal Zhang Maoming.

The Chinese government will provide approximately NRs 11 billion in grant assistance for the second phase entailing 8.2 km road, where China will also provide technical assistance. The first phase of the project, covering the 10.39 km Koteshwar–Kalanki section that began in 2012 was also developed under China’s grant assistance of around NRs five billion and completed in 2018. The 27.2 km ring road currently encircling cities of Kathmandu and Lalitpur was completed in the nineties, also under Chinese assistance.

The second phase was supposed to begin immediately afterward with the KP Sharma Oli led government signing a G2G agreement with China. The project however stalled afterwards with delays from both sides, including due to the COVID-19 pandemic and a lack of site clearance.

Several Chinese technical teams have visited the site over time, but overall progress has remained slow. Reportedly, the Henan Communications Planning and Design Institute was assigned to prepare a Detailed Project Report (DPR) within two months; however, the report has not yet been formally submitted.

In February 2023, a joint inspection of the project site was carried out by then Deputy Prime Minister Narayan Kaji Shrestha and Chinese Ambassador Chen Song. During discussions, the Chinese side repeatedly emphasized the need for timely site clearance to prevent further delays, particularly in view of criticism over an extended period of time taken to complete the first phase of the project.

In September 2024, Nepal and China exchanged letters of agreement and later issued a joint statement during Prime Minister Oli’s visit to China, which included provisions to move forward with the second phase of the Kathmandu Ring Road Improvement Project. Subsequently, China’s CCCC First Highway Consultants and Xi’an Fangzhou Engineering Consulting were involved in preparing the Detailed Project Report (DPR). Still the DPR has not yet been officially handed over to Nepal, as its submission remains pending the finalisation of an implementation agreement between the two sides.

However, the project survey work finally began in mid-April 2025, with designs completed in November 2025. In February 2026, the Sushila Karki-led government approved tax exemptions on imported construction materials and equipment, which was one of the key bottlenecks to the project. The administration also waived visa fees for Chinese consultants, contractors, and workers involved in the project. Following the latest agreement, DPR preparation is now expected to move forward. It is estimated to take about six months, after which the tender process will begin.

The expansion of the second section will now begin nearly six years after the completion of the first phase. The 8.2 km stretch will be widened, a concrete bridge will be constructed at Dhungedhara, and three disability-friendly pedestrian bridges will be built along the Sitapaila–Balaju, Balaju–Machhapokhari, and Samakhusi–Basundhara Police Post sections. 

While the Kalanki–Basundhara section will be expanded with Chinese grant assistance, the remaining stretch from Basundhara to Koteshwar is planned to be constructed by the Government of Nepal. Preliminary studies, including assessments of affected structures, are currently underway.