Money

Gautam Buddha airport contractor stops work after not getting paid

- SANGAM PRASAIN, Kathmandu

May 13, 2019-

The contractor for Gautam Buddha International Airport being built in Bhairahawa has stopped work complaining that it has not been paid. The stoppage has dealt another blow to the national pride project which has been facing endless delays since construction started in 2013.

An anonymous source at the Civil Aviation Authority of Nepal, the project executing agency, told the Post that the Tourism Ministry ‘intentionally’ delayed forwarding paperwork to the Finance Ministry to release payment of around Rs200 million to the contractor Northwest Civil Aviation Airport Construction Group. The Chinese company has been complaining about the delayed payment for the last two weeks, he said.

“We don’t know the reason behind keeping back the payment file,” he said, adding that if payment was not released within two weeks, the contractor would claim compensation. “The contractor will not restart work until payment is made.” The Tourism Ministry countered charges of delaying payment saying that the budget had been used up, and the Civil Aviation Authority of Nepal did not act in time to obtain additional funding. Tourism Joint Secretary Nita Pokhrel said the Civil Aviation Authority did not respond in time despite knowing that the approved budget was already spent, and the project needed additional financing that had to be arranged through another source.

“The budget approved by the project financer Asian Development Bank has already been spent, and we have to request the Finance Ministry to arrange financing from another source,” she said. The project has sought Rs100 million in additional financing. According to Pokhrel, the Civil Aviation Authority asked for more money only on May 3. “We immediately wrote to the Finance Ministry on May 5 seeking additional funds for the project,” she said.

“It takes time to arrange funding from another source. We don’t have any intention of delaying the airport project, but the Civil Aviation Authority did not move despite knowing that the project could run out of funds.” The country’s civil aviation body awarded the Rs6.22-billion airport upgradation contract to Northwest Civil Aviation Airport Construction Group in November 2013.

Of the total project cost, the Asian Development Bank provided $58.50 million ($42.75 in loans and $15.75 million in grants) and the Opec Fund for International Development provided a $15 million loan. The Civil Aviation Authority was to bear the rest of the cost as counterpart funding. The airport was initially slated to be ready in December 2017. Fuel and building material shortages due to the months-long Tarai banda in 2015 delayed the upgradation work by six months, and its operation deadline was pushed back to June 2018.

Subsequently, a dispute over payment between the Chinese contractor and the Nepali sub-contractor, Northwest Infra Nepal, stalled work at the construction site for more than six months. As a result, the project deadline was extended many times after the initial extensions. The country’s national pride project was on track for year-end completion, but again it hit a snag with local authorities demanding a higher price for riverbed materials.

Three weeks ago, Butwal Sub-Metropolitan City refused to provide gravel and sand at the old rate and prevented the project from extracting riverbed materials. The sub-metropolitan city had signed an agreement with the project to provide 17,228 cubic metres of riverbed materials, but it reneged on the deal stating that the rates quoted earlier were low, according to project officials. They said that the issue remained to be resolved.

The national pride project has been envisaged to serve the fast-rising business and industrial hub of Bhairahawa and facilitate international pilgrims to Lumbini, the birth place of Lord Buddha. After the first phase of upgradation, the airport’s handling capacity will increase to 760,000 passengers annually. The airport will also become Nepal’s second international airport and serve as an alternative to Kathmandu’s Tribhuvan International Airport in the event of emergencies.

Published: 13-05-2019 08:43

Next Story

User's Feedback

Click here for your comments

Comment via Facebook

Don't have facebook account? Use this form to comment