CAAN invites Chinese company for technical discussions
KATHMANDU, MAR 10 -
The Civil Aviation Authority of Nepal (CAAN) has invited China CAMC Engineering Co, the lowest bidder for the proposed Regional International Airport in Pokhara, for technical discussions. The CAAN move follows the Cabinet nod to proceed ahead with the project development.
The new project has been planned in Chinnedanda, Pokhara, some 3 km east of the existing domestic airport .
“We (CAAN) have informed CAMC about the Cabinet order, and have invited them to hold technical discussions,” said CAAN Director General Tri Ratna Manandhar. “The project will move ahead after the discussions.”
Although three Chinese firms were shortlisted for the project, bids from two others—Sinohydro Corporation and China International Water and Electric Corporation—had been invalid as they discontinued the bank guarantee, according to a CAAN official. The CAMC is now the sole contender of the project contract as it has continued the guarantee.
However, the project will be valid only after the government signs a loan agreement with the China EXIM Bank. The bank will conduct its evaluation on the project feasibility before funding it. “If the bank finds the project viable, the loan agreement proposal will be tabled to the Cabinet for approval,” Manandhar said. “The government will also ascertain how much loan should be sought from the bank.”
The bank has agreed in principle to lend $145 million for the project. After the loan agreement is signed, both CAAN and the Chinese company will sign an agreement for project execution.
A Cabinet meeting on February 15 gave a go-ahead to the bidding process that was put on hold since July 2012. Following the company’s willingness to develop the project as per the government-estimated cost, the Tourism Ministry had asked the government to allow it to continue the bidding process.
The project was dragged into controversy after the lowest bidder, CAMC, quoted 85 percent higher than government-estimated cost of $166-170 million. Subsequently, the bidder selection process was halted after the CAAN unions opposed the deal, arguing that it was not economically viable under the authority’s existing financial status.
“Now that the Chinese company has agreed to build the project as per the costs estimated by the government, around Rs 12 billion of CAAN’s money has been saved,” a CAAN official said.
In the first week of January, CAMC had dispatched a letter to the CAAN expressing its willingness to develop the project as per the CAAN’s bill of quantities (BOQ).
BOQ is a document used in the bidding process that details project costs and the terms and conditions of the construction to enable the contractor to develop the project as per the executing agency’s estimated price.
On February 9, 2012, CAAN had invited bids to build the airport under the Engineering Procurement and Construction model. However, it was forced to extend the deadline twice due to intervention by the Commission for Investigation of Abuse of Authority. On July 18, 2012, CAAN’s tender evaluation committee had opened financial proposals for the project.
A detailed study of the airport project conducted in 1989 by the government in association with the Japan International Cooperation Agency had proposed a 2,500m long and 50m wide runway, a terminal and a cargo building. The construction of the airport , expected to be completed in four years, was estimated to cost $39.6 million at the time.
Source: The Kathmandu Post
