The Chinese contractor of Gautam Buddha Airport upgradation project and local contractors have agreed to resolve the dispute over the payments and resume stalled works at the construction site soon.

A multi-stakeholder meeting held on Monday reached an understanding to conduct an assessment of works completed so far and due payments that need to be settled by respective parties. 

The Chinese contractor, Northwest Civil Aviation Airport Construction Group, has claimed full payment has been released to local contractors. Nepali contractors, on the other hand, claim part of the payment still needs to be made.

Monday’s meeting was held under the chair of Tourism Ministry Joint Secretary Dandu Raj Ghimire. It was also attended by Wan Ziandong, the vice-chairman of Northwest Civil Aviation Airport Construction Group. Wan had flown to Nepal after the government warned to terminate the contract awarded to the Chinese company if it failed to meet the project completion deadline.

“During the meeting, we decided to settle the payment dispute first,” said Raj Kumar Chettri, deputy director general of the Civil Aviation Authority of Nepal (Caan), the project executing agency. “There will also be an assessment of works completed so far.” He said that works are likely to resume after the payment dispute is settled.

Works at the construction site of the airport upgradation project came to a halt last week after local contractors and their workers and suppliers did not show up at the project site stating their due payments had not been settled. The company had hired a number of local contractors for the project development.  According to project officials, the Chinese contractor has received Rs1.30 billion from the project executing agency, but it has completed only Rs650 million worth of works.

Meanwhile, the Chinese company has requested the government to revise the project completion deadline stating the problem it encountered was not expected.

 The contractor has been given a deadline of March 30 to complete 30 percent of the physical works at the project site. So far only 21 percent of the work has been done. “The company has also promised to arrange deficit funds on its own,” said Chettri. “Given their commitment, the work is likely to resume soon.”

The government awarded the contract to upgrade Gautam Buddha airport into an international airport to the Chinese company in October 2014. But trouble began soon after it illegally appointed a subcontractor without informing the project executing agency.

The subcontract was given to Nirvik Chitrakar (Khanal), son of former premier and senior CPN-UML leader Jhala Nath Khanal; Raju Gurung, a local goon and UML supporter; Furbha Sherpa, a UML-affiliated contractor; Shakti Dangol, a close relative of UML leader Khanal; and Manjit Rai, a UML cadre from Ilam which is Khanal’s constituency. The subcontractors were appointed to supply construction materials, labourers, fuel and heavy duty vehicles. The Chinese contractor reportedly gave money to the subcontractors to execute their tasks without any paperwork.

Initially, the subcontractors hired workers and suppliers to provide construction materials, fuel and heavy duty vehicles. But after the subcontractors fled, the Chinese company was forced to settle their unpaid bills.

The airport was originally slated to be ready by December 2017. However, shortages of fuel and building materials due to the months-long Tarai banda in 2015 delayed work by six months and its operation deadline was extended to June 2018. The latest problems are likely to further push back the project completion deadline to 2019.