FinMin recommends EPCF modality for Nijgadh airportThe Finance Ministry has advised the Tourism Ministry to use the engineering, procurement, construction and finance (EPCF) modality to build a new international airport in Nijgadh, situated 175 km from Kathmandu.
The Finance Ministry has advised the Tourism Ministry to use the engineering, procurement, construction and finance (EPCF) modality to build a new international airport in Nijgadh, situated 175 km from Kathmandu.
Last August, the Tourism Ministry had floated two financial modalities—the EPCF and the build, own, operate and transfer (Boot) methods—to develop the project which has been in the works for years.
Following the Finance Ministry’s recommendation, the Tourism Ministry can now go to the Cabinet with its proposal for the new airport.
The Finance Ministry has also asked the Tourism Ministry to keep the second option open in case the first one does not work, said Finance Secretary Shankar Prasad Adhikari. “It was approved by a minister-level decision.”
The type of financial modality to be used to build the airport has been changing with every government. Successive administrations have put forward opposing plans that the airport should be developed through private or public financing.
Boot is a public-private partnership 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.
Initially, Landmark Worldwide Company of Korea had prepared a detailed feasibility study 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. 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.
Several foreign investors, including India, have showed interest in developing the project. However, the KP Oli-led government had decided that Nepal would implement the Nijgadh international airport project on its own.
Subsequently, the Civil Aviation Authority of Nepal (Caan) prepared a preliminary internal financial assessment of the project. Its report said that the project could be constructed at a cost of Rs121 billion, excluding the proposed airport city. Caan has proposed building a 4,000-metre runway.
Amid the confusion, the incumbent government formed a high-level panel comprising joint secretaries from the National Planning Commission and the Finance and Tourism ministries to select the appropriate modality. Meanwhile, the 41st National Development Action Committee meeting chaired by Prime Minister Sher Bahadur Deuba on Friday raised concern over the delay in executing the project. The meeting said that the airport project was not making progress. The high-level meeting has directed the Tourism Ministry to complete all the processes and implement the project as soon as possible.
The project envisions building a large modern airport in Nijgadh in Bara district in
the southern plains as an alternative to Kathmandu’s 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.