The government has formally decided to build Pokhara Regional International Airport, ending long-standing controversy over the project cost. A Cabinet meeting held today took a ‘policy level’ decision in this regard.
Even as the government signed a contract with a Chinese company five months ago to build the airport, the project work has remained stalled because of controversy over the estimated cost of the project.
The project cost fell into controversy when the Civil Aviation Authority of Nepal decided to hand over the project to CAMC Engineering Co of China in May.
CAAN had decided to hand over the project to CAMC after it emerged as the preferred bidder. But the price of $306 million quoted by the company to build the project was almost double than the government estimate of $166 million.
Later, an independent study stated the project could be completed at a cost of $215.96 million.
Based on this, CAMC agreed to build the project at $215.96 million and an agreement to this regard was signed in May.
As per the agreement, the fund required to build the project would be obtained through China Exim Bank, which has been offering soft loans to the country.
Following this, the Ministry of Culture, Tourism and Civil Aviation formally requested the Ministry of Finance to seek a credit line of $215.96 million. This request was sent as no ministry can acquire funds without getting clearance from the finance ministry.
However, the finance ministry questioned why the project cost had swollen to $215.96 million from initial estimate of $166 million, and sought a written explanation from the tourism and civil aviation ministry.
Later, the tourism and civil aviation ministry forwarded the survey report which had come up with a figure of $215.96 million to build the project.
Amidst this, the Cabinet took a decision today to build the project, which, according to tourism ministry officials, has cleared the way to start arranging funds to implement the project.
“The construction of the project would start after the finance ministry approves the proposal for soft loan from China Exim Bank,” said MoCTCA Spokesperson Mohan Krishna Sapkota. The finance ministry will need to get the Cabinet’s nod to acquire soft loan from China.
After the soft loan agreement is signed, the project developer will prepare a detailed design of the airport, which is expected to take around one year. It will then take another three years to complete the construction work.
As per the agreement, the airport will be constructed under the engineering, procurement and construction model.
The government plans to construct the airport on 3,106 ropanis of land at Chinnedanda of Pokhara, which is three km east of the existing airport at Pokhara. Locals and private sector from Pokhara have long been demanding that the government start construction of the airport at the earliest.