TIA sits on Rs5.3 billion while facilities remain in a sorry state

September 07, 2017

The Kathmandu Post, 07 Sep 2017 

Tribhuvan International Airport (TIA) has failed miserably to utilise over Rs5.3 billion collected from air passengers for development of its crumbling infrastructure.

Billions of rupees have been raised to improve airport facilities, but poor management and inability to utilise available funds have led the country’s sole international airport to earn the moniker of “one of the worst airports in the world”.

It has now become customary for many to lob criticisms at airport’s poor facility and infrastructure, but airport authority has not budged so far.

A report prepared by a fact-finding committee formed by the regulatory function of the Civil Aviation Authority of Nepal (Caan), which includes officials from the Tourism Ministry, shows that TIA has so far utilised 3 percent of the money raised from air passengers. The money was raised by levying airport development tax.

The government, on July 17, 2014, allowed TIA to impose airport development tax of Rs 1,000 per passenger, excluding 13 percent value added tax. The tax is included in airfares of passengers flying out of TIA. It is deposited in the Airport Development Fund (ADF) and should be used to improve TIA facilities.

While launching the ADF, which has a life of five years, the Ministry of Finance had directed the Caan not to use this fund to cover administration cost, and salaries and benefits of its employees.

Besides ADF, Rs1,130 is separately collected from every passenger departing TIA as passenger service charge.

The report shows that Rs1.6 billion was deposited in the ADF in the fiscal year 2014-15, Rs1.46 billion in 2015-16 and Rs1.65 billion in the first 11 months of 2016-17.

But expenditure stood at 0.22 percent of the fund deposited in ADF in the fiscal year 2014-15, 0.79 percent in 2015-16 and 7.86 percent in the first 11 months of 2016-17.

“The spending is very poor. An average of 3 percent of the fund has been utilised so far in the last three years. All the while, the airport has fallen flat in terms of offering superior experience to travellers who pay the tax,” said a member of the committee.

Even a small portion of the ADF which TIA has spent was used to pay consultant fee, which is against the mandate.

TIA has been marked with uneven pace of growth. The growth in number of airlines and passenger movement has jumped manifold but infrastructure and facilities remain the same, said the member, who did not wish to be named. In the last five years, passenger traffic (international and domestic) at TIA jumped 17 percent to 5.26 million.

The Caan said it has started rehabilitating the five-decade-old runway at TIA, which frequently sees formation of cracks. This has affected smooth operations of aircraft. It will dip into the ADF to finance renovate the landing strip.

The government is planning to implement the final expansion project of TIA at a cost of $500 million beginning 2019 when the ongoing first phase of upgradation will be completed. The completion date for the first phase of the TIA improvement project has been pushed back to 2019 due to tardiness of the previous contractor. It was originally scheduled to be completed by March 2016. The $92-million project, jointly funded by the government ($12 million) and the Asian Development Bank ($80 million in loan and grant), was implemented on December 6, 2010.  A number of government officials, however, said it would not be wise to spend so much money on TIA as another full-fledged international airport can be built with that financial resource.