A Chinese delegation was scheduled to arrive in Kathmandu on Wednesday night and sign the agreement on Thursday.

Suman has written to Tourism Minister Bhim Acharya stating he is not comfortable to sign the agreement as two Caan board members representing the government are yet to sign the minutes of a board meeting on April 7.

The Caan board had given its go-ahead for the construction of the controversial regional international airport. The board meeting, chaired by Tourism Minister Acharya, approved the project under the revised cost of $216 million recommended by a three-member independent panel formed by the government.

However, Caan board members Surya Acharya from the Finance Ministry and Suresh Acharya from the Tourism Ministry have not signed the minutes. “The minutes don’t hold any legality unless signed by the government representatives,” Suman said.

Although, the signing of a commercial agreement of any project is under the jurisdiction of the director general, the airport project’s case is different as everything has been endorsed by the Cabinet. Suman said either the Caan board should authorise the director general to sign the commercial agreement or the government has to give a clear mandate to sign the pact. “Besides, Caan employees unions are also opposing the deal and I don’t think it is a wise decision to go against them.”

In a statement, Caan employees unions have said they are against the deal as the airport project is not feasible in terms of both technical and financial aspects. The unions said the Caan, whose annual earnings stand at Rs 3.5 billion, is not capable to bear an additional loan of Rs 25 billion as it already has Rs 20 billion loans.

The Caan management had even forwarded a separate proposal to the Tourism Ministry asking it to request the Chinese government to convert the loan pledged by Chinese government into grant.

Under the Engineering Procurement and Construction (EPC) model, the government plans to borrow $145 million in soft loans from China EXIM Bank to build the airport.

Caan sources said the proposal was sent to the ministry a month ago asking the latter to forward the proposal to the Finance Ministry and the Ministry of Foreign Affairs. However, the proposal was stuck at the Tourism Ministry.

Suresh Acharya, joint-secretary at the ministry, who is also a member of the Caan board, said he has not received the agreement minutes. “I will sign on the minutes draft only after studying it,” he said. “If all the processes are genuine, I won’t dishonour the Cabinet decision to give a go-ahead for the project development.” The Commission for Investigation of Abuse of Authority had earlier seized the documents related to the tender process of the proposed airport suspecting financial irregularities, but the investigation has been put on hold at present.

On February 9, 2012, Caan had invited bids for the project. The much-touted airport project has been on hold since July 2012 after the lowest bidder China CAMC quoted $305 million, 85 percent higher than the government-estimated cost. The government had expected the project to cost around $166 million.

Subsequently in January 2013, China CAMC wrote to the Civil Aviation Ministry expressing its willingness to build the project at the government-estimated cost.

Things became more complicated after China Airport Construction Company, a consultant appointed by China CAMC, submitted another study report to Caan quoting an estimated price of $264 million. Add 16 percent price escalation and 13 percent VAT, the estimated outlay would come around $300 million—nearly equal to the original cost quoted by China CAMC.

Another three-member independent cost evaluation panel recommended $216 million. The ministry then tabled the proposal with the latest estimated cost at the Cabinet, but the Khil Raj Regmi-led government put the project on the backburner. The project has been in limbo since 1975.

The government had acquired more than 3,106 ropanis of land for the purpose at the time.

The government has earmarked Rs 1 billion this fiscal for additional land acquisition after a fresh study suggested another 500 ropanis would be required for the project.