Nepal: Ministry of Finance approves PPP model for GBIA

Ministry of Finance has approved public-private partnership (PPP) model to operate in under construction airport, Gautam Buddha International Airport (GBIA) in Bhairahawa.

After the approval of Finance ministry on this PPP model on last Friday, the uncertainty about the GBIA to come into operation has been cleared and the construction work is about to be completed. Ministry of Culture, Tourism and Civil Aviation (MoCTCA) sent proposal to Finance Ministry to operate GBIA in PPP model 6 months ago.

Rabindra Adhikari, Tourism Minister stated that Finance Minister has approved PPP model for the airport operation. Adhikari also informed that after completing construction work, the Letter of Intent (LoI) will be asked from the interested company.

The construction work of the airport has speeded up aiming to come into operation on June month in 2019. Minister Adhikari said that CAAN will operate the airport for a period of time until the completion of PPP Model processes.

In the first phase, Ministry has been preparing to commence the process of operating GBIA by the government of the concerned countries under G to G (Government to Government).

Minister Adhikari said that G to G will be discussed in the first phase and if no interest is given then letter will be demand and the airport would be operated in PPP model. Since the functional management of the authority cannot operate the airport, Minister Adhikari said that there is no alternative way than to go to PPP model.

The distribution of profit between operator and Nepal Government will be discussed after receiving application form and according to that proposal will be prepared.

Europe, America, India and various companies showed interest for taking responsibilities for operation. Thailand, China, India, Sri Lanka, Malaysia and other countries have shown interests in conducting scheduled flights at GBIA.

The runway of the airport will be 3,000 meters long. The Construction work of terminal buildings, water tanks, and control towers, among other infrastructures, are also underway of construction.

CAAN awarded the Rs6.22-billion Gautam Buddha Airport upgradation contract to China’s Northwest Civil Aviation Airport Construction Group in November 2013. The airport was initially slated to be ready in December 2017.

Of the total project cost, the ADB has provided $58.50 million ($42.75 in loans and $15.75 million in grants), the Opec Fund for International Development (OFID) has provided a $15 million loan and CAAN will bear the rest of the cost as counterpart funding.

However, shortages of fuel and building materials due to the months-long Tarai banda in 2015 delayed the up-gradation works by six months, and its operation deadline was revised to June 2018.

Subsequently, a dispute over payments between the Chinese contractor and the Nepali sub-contractor Northwest Infra Nepal stalled works at the construction site for more than six months. As a result, the project deadline was extended many times. The last deadline given by the project financier ADB to the Chinese contractor is June 2019.

Lumbini is 22km from Gautam Buddha International Airport at Bhairahawa. The airport will also become Nepal’s second international airport and also serve as an alternate international air transport point in the event of poor weather conditions or in case natural calamity shuts down the Tribhuvan International Airport (TIA), the only international airport in the country.

Source:  Aviation Nepal

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