The Gautam Buddha Airport project is looking at a second deadline extension as work has slowed to a crawl due to a dispute over payments between the contractor and an illegally appointed subcontractor.

The airport in Bhairahawa, the gateway to the pilgrimage destination of Lumbini in south central Nepal, is being upgraded to an international airport.

Om Sharma, chief of the airport project, said that they had not officially extended the project completion deadline, but it is certain to be pushed back to early 2019.

While presenting the budget statement for fiscal 2017-18 to Parliament on Monday, Deputy Prime Minister and Finance Minister Krishna Bahadur Mahara said that the project would be completed by April 2019, or 10 months behind the first revised schedule.  

The airport was originally slated to be ready in December 2017. However, shortages of fuel and building materials due to a months-long Tarai banda in 2015 delayed work by six months and its operation deadline was extended to June 2018. 

The latest setback, a dispute over payments between the Chinese contractor Northwest Civil Aviation Airport Construction Group and the Nepali sub-contractor Northwest Infra Nepal, has stalled work at the construction site since mid-March.  

Sharma said that there had been 1 percent physical progress each month since then. Both sides are close to resolving the issue, he added.

Tourism Ministry officials said that the agreement between the contractor and the subcontractor was illegal, so they couldn’t make any comment.

Fearing that such problems could recur in other projects, the government has announced through the budget statement that subcontractors can be hired only with its approval from the next fiscal year beginning mid-July. 

Meanwhile, Sharma said that the head of the Chinese company would be leaving Nepal next week to discuss the issue at its headquarters in China, as they have been given a last chance to speed up the progress of the project. 

Sharma said that the physical progress of the project so far stands at 28 percent, and that the contractor had been told to complete 40 percent of the construction work by June. 

“The target is unattainable, but even 4-5 percent progress in June can be considered to be good,” he said. “We are in a ‘wait and see’ position before issuing a termination order,” he added. 

Sharma said that work has not stopped completely but it was continuing at a snail’s pace. As the contractor has already collected 40,000 cubic metres of river materials, the monsoon will not affect work this year. 

Currently, the contractor has mobilized 100 workers and has pledged to double the workforce by next week. “At least 500 workers will be required to expedite the project,” said Sharma. 

According to project officials, the original deadline was extended to June 2018; and even if the second deadline is not extended, the contractor can continue with the project under ‘right to delay damages’.  

Under this arrangement, the contractor has to pay a fine amounting to 0.05 percent of the contract amount, or Rs3.2 million per day, to the project. “This provision is aimed at protecting the contractor from being blacklisted.”

The government awarded the contract to upgrade Gautam Buddha Airport into an international airport to the Chinese company in October 2014.

The national pride project has been envisaged to serve the fast-rising business and industrial hub of Bhairahawa and facilitate international pilgrimage tourism to Lumbini, the birthplace of the Buddha.