Boot, EPCF modalities recommended for Nijgadh airport projectTwo financial modalities for the construction of an international airport in Nijgadh have been recommended—build, own, operate and transfer (Boot) and engineering, procurement, construction and finance (EPCF).
Two financial modalities for the construction of an international airport in Nijgadh have been recommended—build, own, operate and transfer (Boot) and engineering, procurement, construction and finance (EPCF).
A committee formed to suggest the most appropriate plans submitted its report to Tourism Minister Jitendra Narayan Dev on Sunday.
The project envisions building a large-scale modern airport in Nijgadh in Bara district, 175 km from Kathmandu in the southern plains, as an alternative to Tribhuvan International Airport (TIA).
The country’s sole aerial gateway has been strained to capacity. Besides, fog in the winter often forces it to shut down. The proposed facility in Nijgadh will be the biggest in South Asia in terms of area once it is completed.
Initially, Landmark Worldwide Company (LMW) of Korea had prepared a detailed feasibility study (DFS) of the project which envisaged constructing the airport under the Boot model. It had estimated a price tag of Rs65 billion for the first phase.
However, the modality of the project has been changing along with changes in government. Successive administrations have put forward opposing plans that the airport should be developed through private or public financing.
“We have prepared a report and recommended the two appropriate modalities under which the airport can be developed,” said Hari Bahadur Khadka, under-secretary and a member of the committee. “The government will decide which model to adopt.”
Boot is a public-private partnership (PPP) model under which a private organization conducts a large development project under contract to a public sector partner, such as a government agency. This model is often seen as a way to develop large public infrastructure projects with private funding. Under the EPCF model, the contracting firm makes all the arrangements including funding to build the project.
According to Khadka, five indicators—financing, experience and technology, operation and management, legal social and environment issues and risk and risk management—were studied while analysing different modalities before settling on the two. “Based on the study, the scores of these two modalities were better.”
“If the government wants to develop the project, it can opt for the EPCF; and if it wants to involve foreign investment or private financing, it can choose the Boot modality,” said Khadka.
The government had formed a high-level panel comprising joint secretaries from the National Planning Commission and the Finance and Tourism ministries amid confusion over the proper modality.
The deputy director general of the Civil Aviation Authority of Nepal (Caan) and the under-secretary of the Tourism Ministry are members of the panel. Former law and finance secretaries Pramod Karki and Suman Kumar Sharma were included as experts in the committee.
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.
Panel to give a leg up
KATHMANDU: The Tourism Ministry has decided to form a high-powered committee to facilitate and fast track the construction of Nijgadh airport. Accordingly, a proposal was tabled at the Cabinet for approval on Sunday.
The panel, which will be led by the tourism minister as coordinator, will include local political representatives, lawmakers, the chief district officer, head of local bodies and government officials as members, according to Tourism Ministry officials.
Likewise, another committee comprising high-ranking officials from the Defence and Environment ministries, Nepal Army and Civil Aviation Authority of Nepal has been constituted to assist the project, particularly with regard to the construction of an access road and forest clearance.
The government had announced inviting tenders for the construction of Nijgadh International Airport by this fiscal year while presenting the budget statement for fiscal 2017-18 to Parliament. (PR)