Money

Tourism Ministry to buy Nijgadh airport report

- Post Report, Kathmandu

Apr 5, 2018-

The Ministry of Culture, Tourism and Civil Aviation (MoCTCA) has decided to “own” the detailed feasibility study report on construction of long-planned international airport in Nijgadh, Bara prepared by a Korean company. A decision in this regard was taken by newly-appointed Tourism Minister Rabindra Adhikari on Wednesday.

“We will now start revising the report, as it was prepared a long time ago,” MoCTCA Spokesperson Ghanshyam Upadhyaya said. Landmark Worldwide Company of Korea had submitted a detailed feasibility study report of the project in 2011. It had estimated a price tag of Rs65 billion for the first phase of construction of the airport, located 175 km from Kathmandu. According to the Korean company’s feasibility study, the airport will be able to handle 15 million passengers annually and accommodate the Airbus A380 super jumbo after the first phase of construction. The Korean company had prepared the detailed feasibility study report at a cost of $3.55 million. But it has not been paid till date.

“We have been asking the company to submit an invoice to initiate the payment process. But it has not done that,” said Upadhyaya. Although the Korean company had spent $3.55 million to carry out the study, it, according to sources, is demanding more from the government as the payment has been due for a long time.

 

Earlier, the Korean company had sought $7 million from the government. The cost also included 10 percent opportunity cost and 8 percent annual interest for seven years. The opportunity cost, according to the company, is the benefit it could have received had the money been invested somewhere else.

“This issue, however, will not stop the ministry from initiating the process of reviewing the report,” said Upadhyaya. “The project implementation will be further delayed if we wait for the payment issue to be settled. So, we will continue with our works and try to find out ways to resolve the problem faced by the Korean company.”

Successive governments over the last two decades have proclaimed the construction of the airport, which will be the largest in the country, to be a priority; but they did nothing to move the project forward. Nepal needs to build this project as it has one international airport that too with a single runway. This airport too is being operated beyond its capacity, which has delayed arrival and departure of flights. This is preventing Nepal from attracting more foreign visitors to Nepal.

The modern airport proposed to be built in Nijgadh will spread over 80 square kilometres, which will make it the biggest in South Asia in terms of area.Recently, four government agencies had suggested three types of modalities for construction of the airport in Nijgadh, sparking further confusion. The new tourism minister is expected to deal with this issue.

Earlier, the National Planning Commission (NPC) had said it would be a good idea to build the airport under the engineering, procurement and construction (EPC) model with the government bearing all construction cost. After the construction of the airport is completed, it should be operated under public-private partnership (PPP) model, bringing foreign or Nepali investors onboard, the NPC had said.

Published: 05-04-2018 08:23

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