Caan decides to fire no-show Chinese contractor of TIA

- Post Report, Kathmandu
Shanxi Construction Engineering Group of China had been contracted to extend the runway by 300 metres at its southern end

Jun 5, 2018-The Civil Aviation Authority of Nepal (Caan) has decided to cancel the contract awarded to a Chinese company to lengthen the runway at Tribhuvan International Airport (TIA) for not starting work despite repeated reminders.

Shanxi Construction Engineering Group of China had been contracted last October to extend the runway by 300 metres at its southern end, or runway 02. 

According to Caan officials, Shanxi Construction did not start work complaining that prices of construction materials had risen sharply. The company could forfeit its Rs70 million performance bond.

Caan awarded the contract to undertake the major airside and landside infrastructure improvement works, known as Package 1, under the Air Transport Capacity Enhancement Project funded by the Asian Development Bank (ADB), to the Chinese company. Caan Director General Sanjiv Gautam said they were preparing to terminate the contract. “We will be awarding the project to the second among the shortlisted bidders as per the Public Procurement Act,” he added. As per the act, shortlisted bidders can be selected in case a contractor disappears after signing the contract.

The ADB has given the go-ahead to continue the process, he said.

Caan plans to increase the safety area by 300 metres at the southern end so that if an aircraft making its takeoff roll from the northern end aborts takeoff, it will have room to stop on the runway. There is no overrun area at the northern end of the runway. If a plane taking off from this end runs out of runway, it could plunge into a ravine 50-60 metres deep. For this reason, it was decided to lengthen the runway at the southern end.

The project is likely to be delayed by a year. This is the second time that Caan’s runway extension plan has been left in limbo. Previously, it had hired Spanish company Constructora Sanjose to implement the project, but it had to be sent off for non-performance in December 2016.

The runway extension programme is a Package 1 component of the project. The duration of the runway extension project is 18 months. Sanjose and Caan signed a contract for the TIA Modernisation Project, now known as the Air Transport Capacity Enhancement Project, in December 2012 with the completion deadline set for March 2016. Caan subsequently sent the Spanish company away by issuing a ‘notice of termination’ on December 9, 2016 for delays. The termination of the contract became effective on December 27, 2016. In four years, the project had recorded a meagre 17 percent physical progress.

In June 2017, Caan again invited bids to get the stalled project moving. It also broke up the project undertaken by the Spanish company into four different packages. Package 2, which includes the construction of an international terminal building and associated works, has been awarded to a Nepali contractor under national competitive bidding.

Package 3, which consists of building a parallel taxiway and international apron, is yet to be awarded. Package 4 consists of soil filling works on the northern side of the airport. There are no signs of the contract for Package 4 being awarded any time soon.

Published: 05-06-2018 08:38

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