Proposal to develop SIA tabled at Cabinet

- SANGAM PRASAIN, Kathmandu

Mar 22, 2016-

Tourism Minister Aananda Prasad Pokhrel has said a proposal to develop Second International Airport (SIA) in Nijgadh, Bara, using domestic resources has been tabled at the Cabinet for its approval.

“The proposal was not discussed at the Cabinet last week due to preparations for Prime Minister KP Sharma Oli’s visit to China. But sooner or later, it will be approved,” said Pokhrel.

He said the Civil Aviation Authority (Caan) will lead the project and necessary funds will be generated issuing bonds and shares, or the government could inject funds on an annual instalment basis.

On Sunday, the parliamentary Development Committee directed the Finance and Tourism ministries to get on with the construction of SIA  by using their own resources. 

However, government officials have questioned how the proposed airport, which will be the largest in South Asia when completed, will be built as issues like investment and modality remain to be resolved. Moreover, India has been showing growing interest in undertaking the mega project, which could complicate things, they said.

According to them, although proposal has been tabled at the Cabinet, things have become complicated after Prime Minister KP Sharma Oli’s India visit.

“The Prime Minister’s Office told the ministry to slow down,” said the government officials. “The project could stall again due to 

confusion over whether the government should develop it with its own resources or give ‘preference’ to the southern neighbour.”

The planned modern airport in Nijgadh, which is located 175 kilometres south of Kathmandu, will be spread over 80 square kilometres.

In July last year, a delegation from the Airports Authority of India had formally urged the Nepal government to give “preference” to the southern neighbour when selecting a contractor. The team had said that the project needed huge funding, but that it would not be a problem as India’s public and private sectors were ready to invest in the project.

“India’s interest in developing the airport is reasonable as the proposed site is close to Nepal’s border with India, and it would be more accessible to a large section of the population in Bihar,” said a high-level government official at the Tourism Ministry. However, the ministry has lately said that it wants to build the airport by mobilizing its own resources. 

Last February, Minister Pokhrel had ordered the Caan to conduct a separate financial assessment of the airport. The preliminary report was submitted to the ministry with a recommendation that the project can be constructed for a price tag of Rs121 billion, excluding the cost of the proposed airport city.

In 2011, Korea’s Landmark Worldwide Company (LMW) had submitted a detailed feasibility study of the airport project to the government, and estimated that the airport, which would be built in 

three phases, would cost 

Rs82 billion.

It has estimated a price tag of Rs65 billion for the first phase, Rs7.78 billion for the second phase and Rs8.79 billion for the third phase. The Korean company had assessed that the total investment would come to Rs358 billion by 2046-50. 

The preliminary internal financial assessment conducted by Caan has proposed building a 4,000-metre runway while LMW’s plan has a 3,600-metre runway. Likewise, Caan has proposed building a 100,000-square-metre international passenger terminal building against the 75,000-square-metre building proposed by LMW.

Published: 22-03-2016 09:32

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