The Japan International Cooperation Agency (JICA) is currently conducting a feasibility study on this Nepali tunnel project, the sources said.

The Nagdhunga-Naubise section, which is the entry point to Kathmandu Valley, contains steep gradient and sharp curves. This usually results in traffic congestion, affects movement of large vehicles and raises the chances of road accidents. Construction of a tunnel road in this segment will reduce travel time and traffic congestion, sources said.

"As per our discussion with JICA officials, the Japanese government will complete the feasibility study within a year and if it finds the project viable, it will also construct it on its own," said Madhu Masashini, joint secretary at the Ministry of Finance (MoF). He also informed the Japanese government is positive about providing grant or loan to build the tunnel project.

The government has long been planning to build a tunnel road on the Nagdhunga-Naubise segment and had also conducted a feasibility study last year, which had concluded that a 2.35km tunnel linking Imakhel of Nagdhunga with Sisnekhola of Naubise was viable. Back then, it was estimated that construction of the tunnel would cost NPR 5bn, including the cost for building an access road to the tunnel. Upon completion of the government’s feasibility study, JICA had shown interest in conducting a fresh study on its own.