EXIM Bank condition leaves govt in dilemma
KATHMANDU,, MAR 29 -
The Export-Import (EXIM) Bank of China has set a ‘condition’ that developers for the proposed Regional International Airport at Chinnedanda, Pokhara should be one of its recommended companies to be eligible for the soft loans, a highly placed government source said.
A three-member Chinese team, led by Li Dan, assistant general manager of the bank’s credit department, met the government representatives here on Tuesday and put forward the condition.
As per the condition, developers or the aspiring Chinese firm eyeing the project should be the bank’s listed company or the one recommended to the bank by the Chinese government, among the bidders vying for the project.
Amid uncertainty that the project could be awarded to any of the Chinese developers under the competition, the Bank has come forward with the latest ‘condition’, the source said.
However, a senior official at the Finance Ministry said that the Exim Bank usually finance the projects under the condition that contract should be awarded to a company that was proposed by the Chinese government. “The Exim Bank may not approve the bidding process if the listed company was not selected even if they are other Chinese companies,” said the official. “It is the modality of aid China Exim Bank has been practicing.”
The government plans to develop the airport with the soft loan estimated at US$ 145 million from the Chinese bank. The government has sought the bank’s soft loans for the project after China appeared positive to finance the project.
Under the Engineering, Procurement and Construction (EPC) contract that only allows Chinese bidders to participate, the Civil Aviation Authority of Nepal (Caan) had called for the proposal on February 9 to develop the airport. Caan even extended the deadline until April 24.
The bank’s major concern was that the project could go to bidders who are not on its list. The delegation has set a condition that at least four of its bidders should be picked in the short-listing process —to be evaluated on the basis of technical and financial eligibility—and one of them be awarded the project.
Ensuring the bid for the bank’s recommended company has left the government in a dilemma as it has to abide by the Public Procurement Act. Besides, the latest directives issued by the Parliamentary Public Accounts Committee to select the developers under free competition has landed the tourism ministry into an awkward position.
Apart from four bidders that were recommended by the Exim Bank, six other Chinese companies—not listed by the bank—have also procured the bid documents, according to sources.
The bank’s delegation has also made it clear to the government that it cannot disperse the soft loan if the project was won by other bidders not recommended by them. The bank is now waiting for the Caan decision on document processing. “The bank has also said that all the agreement will be done after Caan ensures the selection of one of its recommended developers for the project,” the source added.
The government had acquired over 3,106 ropanies of land for the construction of the airport in 1975. And in 1989, the government and Japan International Cooperation Agency had conducted the detailed study. The study had proposed a runway that will be 2,500m long and 50m wide, a terminal and a cargo building. The construction, which was expected to be complete in four years, was estimated to cost of $39.6 million at the time. However, a new study has estimated the project cost at over $180 million.
Source: Kantipur
