"The Union Cabinet chaired by Prime Minister Narendra Modi today approved a memorandum of understanding (MoU) to be signed between India and Nepal for laying down implementation arrangement on cost sharing, schedules and safeguard issues for starting construction of a new bridge over Mechi river at Indo-Nepal border," the Ministry of Road Transport and Highways said in a statement.
The estimated cost of construction of the bridge is Rs 158.65 crore, which would be funded by the Government of India through ADB loan, it said.
Mechi bridge is the ending point of Asian Highway 02 in India leading to Nepal and provides critical connectivity to Nepal.
The government said construction of the bridge will improve regional connectivity and has potential to strengthen cross border trade between both the countries and cementing ties by strengthening industrial, social and cultural exchanges.
It said National Highway and Infrastructure Development Corporation (NHIDCL) under the Ministry of Road Transport and Highways will be the implementing agency for this project.