The Tourism Ministry on Sunday told a joint meeting of the Parliamentary Finance and Development committees that it has initiated process to prepare another Detailed Project Report (DPR) of the proposed Second International Airport (SIA) in Bara, Nijgadh.

The plan to prepare new DPR is based on the Civil Aviation Authority of Nepal’s (Caan) new financial estimate that the proposed airport can be constructed at a cost of Rs121 billion.

The planned airport in Nijgadh, located 175 kilometres south of Kathmandu, will be spread over 80 square kilometres, which will be the biggest airport in South Asia in terms of areas.

In April 2012, Korea’s Landmark Worldwide Company (LMW) had submitted a detailed feasibility study of the airport project to the government and estimated the project 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 company had conducted the study at a cost of $3.55 million.

The government had awarded the contract to carry out the study to LMW in March 2010. LMW’s report has proposed constructing the airport under the “build own operate and transfer” (Boot) model.

However, after the government’s decision to build the project using its own resources, the ministry is in a dilemma over the project’s modality. “We are in the process of preparing new DPR of the project to begin construction,” Tourism Minister Jeevan Bahadur Shahi told lawmakers. He said the government would also consider the report of LMW and make use of its fundamental contents.

Sunday’s meeting directed the government to review the contract agreement signed with LMW, stating the agreement was not transparent. It also directed the government to make it clear the model that it wanted to adopt to develop the airport project.

A preliminary internal financial assessment of 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.

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.

Meanwhile, Caan said the airport would be able to handle 20 million passengers annually in the first phase. The new assessment has proposed 25 aprons.

The government has allocated Rs2.5 billion for the project this fiscal year.