Finance Ministry okays another Rs 700 million for Bhairahawa airport project

- Post Report, Kathmandu

May 14, 2019-

The Finance Ministry said it had approved additional funding of Rs700 million to restart the stalled Gautam Buddha International Airport project.

The contractor for the airport project being built in Bhairahawa had stopped work complaining that it had not been paid. The latest stoppage was another blow to the national pride project which has been facing endless delays since construction started in 2013.

Dil Bahadur Chhetri, under-secretary at the Finance Ministry, admitted that there was a slight delay in responding to the Tourism Ministry’s proposal for arranging additional budget for the airport project.

“As all officials at the Finance Ministry are busy with budget preparation work, approving the additional budget transfer to the project was slightly delayed,” he said, adding that the ministry had to follow procedure while dealing with foreign aid projects. “It’s not that you apply today and get the budget tomorrow.”

He said that the Tourism Ministry was also not serious about making a quick decision about the requirement for more money. “But it’s good that the project has made visible progress and sought additional budget.”    

An anonymous source at the Civil Aviation Authority of Nepal, the project executing agency, had 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.

The Tourism Ministry countered charges of delaying payment saying that the Civil Aviation Authority of Nepal did not act in time to obtain additional funding even though it know that the budget had been used up. “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,” a ministry official said. 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 birthplace 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: 14-05-2019 10:05

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