A payment dispute between the Chinese contractor for the Gautam Buddha Airport project in Bhairahawa and the ‘illegally’ appointed Nepali subcontractor has not been settled even after two months since work came to a halt.

The Chinese company Northwest Civil Aviation Airport Construction Group and the subcontractor Northwest Infra Nepal had agreed to an ‘out of site settlement’ by hiring a legal consultant, but they failed to make any headway on Friday.

Senior advocate Yubaraj Sangroula has been hired to arbitrate between the two sides. “It will take a few more days to settle the dispute,” said Om Sharma, chief of the project. “It’s an out of site settlement, an issue which is settled out of the project site.”

The Chinese contractor has claimed that full payment has been released to local subcontractors, but they say that there are outstanding payments.

A project normally constitutes four parameters — time, cost, quality and quantity. “Although both sides have agreed on three of the parameters, the actual cost spent on the project as of now is yet to be ascertained, which has complicated things,” he said.

Tourism Ministry officials said that the agreement between the contractor and subcontractor was illegal, so they can’t make any comment. “They have to settle the payment dispute on their own,” said a ministry official. 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 construction works.

The project requires more than 300 workers daily. However, only 60-70 workers are currently engaged at the construction site. So far, 21 percent of the work has been done. The subcontract for the supply of construction materials, labourers, fuel and heavy duty vehicles had been awarded to Northwest Infra Nepal. The company is owned by Nirvik Chitrakar Khanal, son of former premier and senior CPN-UML leader Jhala Nath Khanal.

The Chinese contractor reportedly gave money to the subcontractor to execute the tasks without any paperwork.

Last March, Wan Ziandong, the vice-chairman of the Northwest Civil Aviation Airport Construction Group, flew into Nepal after the government warned that the contract awarded to the Chinese company would be terminated if it failed to meet the project completion deadline.

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 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.