Agreement between His Majesty's
Government of Nepal and the Government of India for Establishing
an Engineering School at Kathmandu
Kathmandu, 31 August 1960
His Majesty's Government of Nepal, hereinafter
called H.M.G.' and the Government of India, hereinafter
Being desirous to cooperate with each
other in promoting economic development of Nepal;
Have agreed as follows:
1. G.O.I. agree to provide financial assistance
to the extent of Rs. 8.50 lakhs (Indian Currency ), out
of. the overall Aid funds, generally, for establishment
and maintenance of Engineering School at Kathmandu, as contained
in the appended 'Report' hereinafter called the 'Programme'to
be utilised before 31.3.1966.
2. The Programme aims at
(a) Establishment of an Engineering School
for training overseers, draftsmen, etc. at Kathmandu to
meet the demand of Engineering personnel in Nepal for execution
of the various development schemes in the country.
(b) Maintenance of the school for a period
of five years.
3. The Programme implemented by the Engineering
School Development Board constituted under the Vikas Samiti
Ain, 2013, of H.M.G., hereinafter referred to as the 'Board'.
However, if at any time during the continuance of this Programme,
H.M.G. wish to dissolve the Board, they shall consult the
Director, I.A.M. and make suitable alternative arrangements
for the execution of the Programme.
4. Whereas, generally, the scheme contained
in the above- mentioned Programme would form the basis,
this could be substituted or altered by H.M.G. in consultation
with the Director, I.A.M.
5. The Director, I.A.M., shall act as
Adviser to the Board. The Director, IA.M. in his capacity
as Adviser to the Board, shall be invited to attend all
the meetings and in his absence, he may nominate any other
officer/officers of Indian Aid Mission to attend the meetings
of the Board on his behalf. The Director, I.A.M., shall
be consulted on the Programme, annual budgets and the formulation
and introduction of financial procedures. Monthly progress
reports of expenditure shall be sent to the Director, I.A.M.
6. H.M.G. will acquire land for the School
and shall arrange the supply of timber, sand, stone, limestone,
and other raw materials, free of royalty, for the requirements
under this Programme.
7. H.M.G. will also ensure that the goods,
materials, equipment and machinery brought into Nepal or
moved from one place to another within Nepal, are exempt
from all duties, taxes and cesses. The exemption shall also
extend to the personnel and transport working for the project.
8. Provision of foreign exchange, if any,
involved in the implementation of the Programme will be
the responsibility of H.M.G.
9. H.M.G. will make necessary security
arrangements for the protection of the personnel as well
as the materials at the various sites of construction and
operations during the implementation of the Programme.
10. In the event of legal action arising
from activities undertaken in pursuance of this Agreement,
H.M.G. will assume full responsibility for the defence of
such action in Nepal, and will take the responsibility for
assuring execution of the Project undertaken pursuant to
11. H.M.G. will provide the nucleus for
the Engineering School in the shape of purchase of suitable
building. The entire expenditure on the remaining non-recurring
items will be met out of G.O.I. funds. The recurring expenditure
during the first year will also be met out of G.O.I. funds.
From the second year to the fifth year the G.O.I.'s contribution
towards recurring expenditure will be progressively reduced
and the liability for contributing the balance will be assumed
by H.M.G. The G.O.I. will make no contribution towards recurring
expenditure beyond the fifth year.
12. Within the overall financial ceiling
of Rs. 8.50 lakhs G.O.I.'s aid will be available in cash
(Indian Currency), kind or services or technical personnel,
as may be mutually agreed upon between the Director, I-A.M.
and the Board, from time to time.
13. Subject to the provisions of Article
11, the funds provided by the G.O.I. under this Agreement
will be utilised
(1) for purchase of stores, equipments,
vehicles, furniture and machinery required in connection
with establishment and maintenance of the Engineering School;
(ii) for meeting the expenditure on salaries,
allowances, and travelling allowances, etc. of the staff
employed for the execution of the Programme;
(iii) for meeting the cost of personnel
obtained from India to advise and assist in the execution
of the programme;
(iv) for carrying out additions, alterations,
and repairs to the existing building and for erecting new
buildings required for school, hostel for students etc.;
(v) for paying stipends to students.
14. Procurement of stores, equipments
and other necessary machinery will be the responsibility
of the Board but the Director, I.A.M. will, if possible,
render assistance in this respect when approached by the
15. The expenditure for any purchases
made through G.O.I. and expenditure under item (iii) of
Article 13 above, will be incurred directly by the G.O.I.
and amounts debited to the funds which the G.O.I. is to
provide under this Agreement. Any expenditure incurred by
the Director, I.A.M. before the signing of this Agreement
in pursuance of the implementation of the Programme, shall
be eligible for being debited to the overall aid under this
16. The Indian Aid available in cash will
be by way of advances, paid to an account to be opened in
the Nepal Rashtra Bank in the name of the Engineering School
Development Board. The account will be opened with an initial
deposit of-Rs. 2 lakhs, consisting of a permanent advance
of Rs. 1 lakh and another Rs. 1 lakh representing the first
recurring instalment. The permanent advance of Rs. 1 lakh
will be adjusted in the final instalment, to be paid under
this Agreement. Further advances will be made on the basis
of certificates rendered by the Board, which will be supported
by an Expenditure Report by the Accounts Officer for the
Programme to the effect that 75% of the amount of last instalment
(excluding permanent advance) has been expended for the
purposes for which it was given. The funds shall not be
mixed with similar funds from other (foreign) agencies.
17. The contribution of H.M.G. under Article
11 will be deposited into the account of the Board every
quarter. The contribution of H.M.G. may include funds received
from other agencies.
18. The Board shall set up its own Accounts
Organisation under an Accounts Officer who will be advised
and assisted by an Accounts Officer, lent by the G.O.I.
H.M.G. will arrange annual audit of the works and expenditure.
Audit charges will be borne by H.M.G. The Director, I.A.M.
or his nominee, may inspect and audit any records and accounts
with respect to the aid provided by the G.O.I. under this
19. All the equipments, stores, machinery,
etc. left over on completion of the Programme will be used
only for the maintenance of the School. All unspent balances
of cash advances by the G.O.I., after meeting the liabilities,
shall be refunded to the G.O.I. on completion or determination
of this Agreement.
20. This Agreement shall come into force
with effect from its signing and will remain in force upto
31.3.1966 unless terminated earlier by either party, giving
three months' notice.
IN WITNESS, WHEREOF, we, the undersigned
being duly authorised by our respective Governments, have
signed the Agreement.
DONE at Kathmandu, in Nepali and English
languages in two copies each on this 31st day of August,
Sd/- (R.P. JOSHI)
On behalf of His Majesty's Government of Nepal
Sd/- (D.R. KOHLI)
Bilateral Treaties & Agreements (Volume 3)
For the Government of India
Finance Secretary. Director, Indian Aid Mission.