Stalled airport projects call for unified solution

April 13, 2017

The Kathmandu Post, 13th April 2017, Post Report, Kathmandu

With all four international airport projects bogged down in problems, the parliamentary Development Committee on Wednesday directed the government to deal with them through a single window.

The $92-million Tribhuvan International Airport (TIA) improvement project in Kathmandu, jointly funded by the government ($12 million) and the Asian Development Bank ($80 million in loan and grant), was launched in December 2010, and the completion deadline was set for March 2015. 

The completion date had to be pushed back to 2019 due to the tardiness of the contractor who has since been fired. The Civil Aviation Authority of Nepal (Caan) has invited fresh bids to get the stalled project moving. 

It has broken up the project into three packages—runway extension, international terminal building expansion and utility works. The project plans to issue further calls for tenders for soil filling and drainage works by April-end. 

Likewise, the expansion of Gautam Buddha Airport in Bhairahawa into an international airport was originally slated for completion by December 2017. Shortages of fuel and building materials due to the months-long Tarai banda in 2015 delayed work by six months, and its operation deadline was extended to June 2018. 

The latest setback—a dispute over payments between the Chinese contractor and the Nepali sub-contractor—has stalled work at the construction site. The delay is likely to further push back the project completion deadline to 2019. The government awarded the contract to upgrade the airport to the Northwest Civil Aviation Airport Construction Group of China in October 2014. 

“Six to seven years is more than sufficient time for the development or upgradation of any project,” said Madhu Marasini, joint secretary at the Finance Ministry. “We were expecting Gautam Buddha Airport to be ready within the stipulated time, but it has been infected by the ‘virus’ as well,” he told lawmakers. “We have adequate funds to finance the country’s airport projects, but the spending capacity is dismal.” 

Trouble at Gautam Buddha Airport began after the Chinese contractor illegally appointed a subcontractor without informing the project executing agency. The subcontract was given to Nirvik Chitrakar (Khanal), son of former premier and senior CPN-UML leader Jhala Nath Khanal. 

The Northwest Civil Aviation Airport Construction Group has claimed that full payment has been released to local contractors. However, Nepali contractors maintain that the Chinese company still owes them money.In a bid to stop such practices in the future, the Development Committee has told the government that agreements signed between the contractor and subcontractor should be legal and transparent.

Meanwhile, Lawmaker Ram Kumar Bhattarai said that a new trend was spreading in the construction sector—original contractors being fired and new ones being hired. This practice has pushed major projects into a state of uncertainty, he added. “No one is accountable if a three-year project drags on for 10 years.”

Likewise, the proposed international airport project in Pokhara has run aground due to issues over opening an escrow account. The government signed a $215.96 million soft loan agreement with China EXIM Bank in March 2016 for the construction of the new airport in Pokhara. 

No progress has been made since then because the escrow account has not been opened. Finance Joint Secretary Marasini said that EXIM Bank officials were ready to open a joint escrow account with Caan, and the issue would be settled within a few weeks. 

Meanwhile, the much talked about modern international airport project in Nijgadh, Bara has remained on paper for the last 20 years, said Lawmaker Bhattarai.  

Hari Adhikari, chief of the Nijgadh airport project, said they had targeted completing the Environment and Social Impact Assessment Report by this fiscal year.