Print Edition - 2015-07-29 | MONEY
Investment Board to consult with WB, ADB
Jul 28, 2015-
The Investment Board Nepal (IBN) on Tuesday decided to hold a joint consultation meeting with two international donor agencies to help the government decide between the Public Private Partnership (PPP) and other models for the upgradation of the Tribhuvan International Airport (TIA) and the development of the proposed Second International Airport (SIA) in Nijgadh, Bara.
An IBN board meeting chaired by Prime Minister Sushil Koirala decided to hold discussion with the International Finance Corporation (IFC) of the World Bank Group and the Asian Development Bank (ADB).
“Apart from the IFC and the ADB, we will call Finance Ministry and other stakeholders for the meeting and discuss the direction for the appropriate modality we need to follow for timely commencement of these two projects,” said IBN CEO Radhesh Pant. “With this, we also aim to know if we need further study on these two projects.”
The SIA scheme envisions building a modern airport in Nijgadh, Bara, 175km from Kathmandu, as an alternative to saturated TIA, the country’s sole aerial gateway.A joint-committee, comprising officials from the Ministry of Tourism and Civil Aviation, the Civil Aviation Authority of Nepal (Caan) and the Investment Board Nepal (IBN), has decided to conduct a detailed survey on the SIA project and the government is preparing to hire the IFC for the purpose.
After the Cabinet approves the survey proposal, the IBN and IFC will sign a memorandum of understanding to carry out the survey which will take at least two months, according to Tourism Ministry officials. The IBN has planned to bundle the two projects and award it to a single developer. The IBN believes that it would be difficult to find investors for the SIA until the Kathmandu-Tarai Fast Track is in place.
Since the project is unlikely to make a profit for the next 20-25 years because of the competition from the Kathmandu airport, both the projects should be assigned to a single company to enable it to use the TIA profits to compensate for the SIA losses.
The first phase of the SIA is estimated to cost $650million. The airport will be able to handle 15 million passengers annually and accommodate the super jumbo Airbus380 after the first phase of construction.
By the end of the third phase, the airport will have a parallel runway, shooting its annual capacity to 60 million passengers. Upon completion, the SIA will be an air hub joining 27 cities in South Asia, generating over 100,000 jobs.
Likewise, the IBN board has also approved Rs 36 billion in Foreign Direct Investment (FDI) of China’s Hongshi Hodlings Group and Shivam Holdings Nepal to set up a cement factory in Nepal.
This is the largest foreign direct investment (FDI) pledge yet from the northern neighbour. The Chinese company will invest 70 percent in the project, while the Nepali partner will inject the remaining amount. According to Pant, the cement plant to be established by Hongshi-Shivam will have an annual production capacity of 4.3 metric tonnes.
“The company is currently searching for an appropriate mining site,” Pant said. Hongshi Holdings’ investment will be the third largest FDI in the cement industry after the Nigeria-based Dangote Group and Reliance Cements of India.
Published: 29-07-2015 08:52