The Kathmandu Sustainable Urban Transport Project was designed to address Kathmandu Valley’s urban challenges including congestion, inadequate mobility and transport service, and poor air quality. It focused on delivering a more efficient, safe, and sustainable urban transport system (UTS) to meet the challenges and was part of a coordinated effort among development partners (DPs), including the Asian Development Bank (ADB), the World Bank, Japan International Cooperation Agency, and the United Nations public–private partnership (PPP) team. ADB provided a $10 million grant and $10 million loan for the project as well as administered the $2.52 million grant from the Global Environment Facility.

The project’s envisaged impact was a more efficient and sustainable UTS in the Kathmandu Valley that would support higher local economic growth while addressing climate change and mitigating air pollution from vehicles. Its expected outcome was improved urban public transport and walkability in the inner city by encouraging a modal shift from private vehicles and improving traffic conditions. It had four components at appraisal (i) improved and upgraded public transport, including the introduction of low-carbon-emission vehicles, and strengthened capacity of the Department of Transport Management (DOTM), (ii) improved traffic management to reduce congestion, (iii) improved walkability in the city center, and (iv) enhanced air quality monitoring.     

At completion, the project achieved only 4 of its 21 output targets, partially achieved 10 targets, and did not achieve 7.  Output shortfalls/non-accomplishment occurred in all components, on each of which, only 1 target was achieved.  Specifically, the project slightly overachieved its target in improving walkways/sidewalks and was able to create a fund flow mechanism to finance electric vehicles, develop awareness on safe driving behavior and road safety, and provide emission testing equipment to DOTM.  However, it was not able to restructure the DOTM and create a new public transport branch, as planned; rationalize public transport; update the emission standards for vehicles; and launch a public awareness campaign on pollution and public transport health hazards to women, children, and other vulnerable groups.   Instead of establishing two pilot routes for low-carbon-emission vehicles, it was able to complete only one route, with significant delays; and instead of improving 14 junctions along a key route and in the inner city, it was able to able to improve only 10 junctions, with delays and design compliance issues.

Inadequate due diligence during project preparation, particularly insufficient assessment of the institutional capacity of implementing agencies led to unrealistic targets and indicators. Lack of DP coordination aggravated the complex project coordination challenges that stemmed mainly from the absence of executing agency (EA) jurisdiction over the implementing agencies (IA).  Aside from issues on capacity and implementation arrangements, the project design had other shortcomings: (i) implementation period was too short for such a complex project; (ii) cost estimates for some components were unrealistically low; (iii) EA and IA project ownership were lacking; (iv) a viability analysis for the deployment of electric buses was not conducted; and (v) the procurement and contract management capacity of the IAs did not match the complexity of the project.

Because of limited outputs, the project achieved only 2 of its 6 outcome targets ─ Kathmandu was rated as one of the 30 most walkable cities in Asia in 2018, against the target of being one of the 50 most walkable cities in Asia by 2015, and; the ridership on the one pilot route established increased by 36% in 2018–2019, against a target of a 20% increase in the two pilot routes. However, it failed to reduce traffic congestion and road accidents, with the number of registered vehicles increasing by 350% between 2007 and 2017. Moreover, from the gender and social inclusion perspective, it was not effective in delivering the envisaged public transport design standards that meet the specific needs of women, children, the elderly, and people with disabilities.

Due to low completion and achievement rates, the project has overall had a limited development impact. While the residents along the corridor of the low-carbon pilot route have experienced somewhat less carbon exhaust, Nepal’s CO2 emissions increased from 5,057 kilotons in 2010 to 8,033 kilotons in 2014.   Walkability in some city core areas has improved but to a very limited extent.  Furthermore, the public perception is that the air quality in most of the cities has worsened over the past 10 years, particularly in Kathmandu. The project also has had very little influence on private sector development and the capacity development of EA and IAs.

The project had the Ministry of Physical Infrastructure and Transport as EA.  It was supported by project implementation units in five agencies (i) DOTM for public transport; (ii) Department of Roads for traffic management; (iii) Metropolitan Transport Police Division for traffic control and enforcement; (iv) Kathmandu Municipal Corporation for parking, pedestrian improvements, and PPP initiatives; and (v) Department of Environment for air quality monitoring.