Pokhara International Airport: Pact with Chinese company by August: CAAN

KATHMANDU, JUN 01 -

The Civil Aviation Authority of Nepal (CAAN) has said a commercial agreement on the much-delayed regional international airport in Pokhara will be signed with China’s CAMC Engineering Co by August.

A technical team led by Ranjan Krishna Aryal, joint-secretary of the Tourism Ministry, has returned back from China after studying airport models there.

The Chinese government had invited the Nepali officials for the observation of airport models in China which could be feasible for the proposed airport in Chinnedanda — some 3-km east of the existing domestic airport in Pokhara.

“The exact date for the signing of the commercial agreement has not been fixed, but it will probably happen by August,” said Tri Ratna Manandhar, director general of the CAAN, who was also a member of the team.

The agreement will be signed with the lowest bidder — CAMC — after it submits the detailed feasibility study (DFS) of the airport to the CAAN.  At present, CAMC is conducting the DFS of the airpor“. “We will further review the DFS before awarding the project contract or signing the commercial agreeme”t.”

Manandhar, however, said a loan agreement with the China’s EXIM Bank should be done before the commercial agreement. The government plans to borrow $145 million worth of soft loans from the bank for the project.

The technical teams of Nepal and China have finalised a number of designs and models appropriate for the proposed airport after conducting a field observation of different airports in China. The Nepali team visited Beijing International Airport and Chengdu International Airport in China, among others.

The government has given its green signal for the development of the much-controversial airport after the lowest bidder expressed its willingness to develop the airport at the government-estimated cost.

The airport bidding process had been put on hold since July 2012, after CAMC quoted 85 percent higher than the government-estimated cost for the project. CAMC had quoted $305 million. After the government’s go-ahead, CAAN has assigned the lowest bidder to carry out the detailed study of the airport.

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.

Subsequently, the project was dragged into controversy with

CAAN unions opposing the deal, arguing it was not economically viable under the authority’s existing financial status.

A detailed study of the project conducted by the government in 1989 in association with Japan International Cooperation Agency had proposed a 2,500-m long and 50-m 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 then.

The project has been in limbo since 1975 when the government acquired more than 3,106 ropanies of land. Pokhara is a major tourism hub of Nepal. Around 400,000 tourists visit the lake city annually.

Source: The Kathmandu Post