The government has agreed to reimburse Landmark Worldwide Company (LMW) of Korea for the cost of conducting a detailed feasibility study (DFS) of the proposed Second International Airport (SIA) in Nijgadh as it has decided to implement the project itself. 

As per the deal, the Korean company would not charge the government for the study if it got the contract to build the airport. Last week, the Tourism Ministry asked LMW to submit paperwork and claim payment. 

The company had conducted the DFS at a cost of $3.55 million and submitted it to the government in April 2012. It received the contract to carry out the study in March 2010. 

LMW’s report has proposed constructing the airport under the ‘build own operate and transfer’ (Boot) model. 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.

“We have formally asked the company to apply for reimbursement,” said Hari Bahadur Khadka, under-secretary at the ministry. 

As per the agreement signed between the government and LMW, the amount of reimbursement needs be validated by an independent auditor. “The process will be initiated after the company submits its documents.” 

The move to reimburse the company follows the government’s plan to assign the Civil Aviation Authority of Nepal (Caan) to prepare a fresh detailed project report (DPR). 

Recently, Tourism Minister Jeevan Bahadur Shahi had informed a joint meeting of the parliamentary Finance and Development committees that they had initiated the process to prepare another DPR of the proposed airport project. He informed lawmakers that the government would also consider LMW’s report and make use of its fundamental contents.

However, the agreement between the government and the company is not clear on who will reimburse it. According to Khadka, if Caan’s board decides to receive the DFS, it will have to make payment to the company. “If not, the government should make payment and a proposal needs to be presented to the Cabinet.” 

The planned airport in Nijgadh, located 175 kilometres south of Kathmandu, will be spread over 80 square kilometres, which will make it the biggest airport in South Asia in terms of area. As per Caan’s new financial estimate, the proposed airport can be constructed at a cost of Rs121 billion.

A preliminary internal financial assessment by Caan has proposed building a 4,000-metre runway while LMW’s plan has proposed a 3,600-metre runway. Likewise, Caan has proposed building a 100,000-square-metre international passenger terminal against the Korean company’s proposal for a 75,000-square-metre building.

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 building 25 aprons. The government has allocated Rs2.5 billion for the project for this fiscal year.

Outsiders recommended for training scheme

The Tourism Ministry has planned to send two persons, neither of whom is from the ministry or Caan, for air accident investigation training in Singapore. According to a ministry source, former tourism secretary Nagendra Prasad Ghimire and Nepal Army Major Subash Thapa have been recommended for the Singapore Cooperation Programme, a training fellowship at the Singapore Aviation Academy. The training is scheduled to begin on February 14. “When ministry and Caan officials require air accident investigation training, it is unreasonable that the ministry should recommend outsiders for the programme,” said the source.