Loan deal to be signed soon

KATHMANDU, MAR 13

The government is scheduled to sign a loan agreement with China Exim Bank for the development of the proposed regional international airport in Pokhara by the next two weeks, the Prime Minister’s Office said.

A two-member team from the bank is in Nepal to conduct a field study to create a basis to decide whether to fund the national pride project or not. On Thursday, the delegation inspected the airport construction site and collected feedback from locals.

The team has pledged to provide the loan at a subsidised rate and conclude the construction of the airport on time.

“The support from locals for the airport’s construction has enthused us,” the bank’s Deputy Director General Zhao Liang told a press meet in Pokhara on Thursday.

The bank has agreed in principle to extend a $215.96 million soft loan to the government to build the airport in Chinnedanda, Pokhara, 3 km to the east of the existing airport.

On Tuesday, the visiting Chinese team along with Chinese Embassy officials held a discussion with officials of the Finance and Tourism ministries.

Last November, the Finance Ministry had formally requested the bank for a soft loan to build the international airport. This is the first visit by bank officials to Nepal after the government’s credit request.

The loan application followed the Cabinet’s go-ahead on October 27, 2014 to construct the much-delayed project with Chinese funding. The loan will be approved on the basis of the appraisal report prepared by the team, according to government officials.

On May 22 last year, the Civil Aviation Authority of Nepal (Caan) had awarded the construction contract to China CAMC Engineering.

The airport will be built under the engineering procurement and construction (EPC) model. The EPC contract binds the contractor to deliver the project at a stipulated time at the predetermined price regardless of any increase in costs that the contractor may incur after the contract is signed.

Source: The Kathmandu Post