Money

‘Premature’ tender for airport expansion project cancelled

The invitation to bid for expansion works at Tribhuvan International Airport (TIA) has been cancelled for being premature, as it was issued without arranging the money to implement the project, sources at the Civil Aviation Authority of Nepal said. ‘Premature’ tender for airport expansion project cancelled

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Sangam Prasain

Published at : December 19, 2018

Updated at : December 19, 2018 09:11

Kathmandu

On December 8, the authority revived the project after a two-year halt and re-invited global bids for soil filling works, construction of international parking bays and parallel taxiway on the northern side of the runway. This is the most important component of the TIA Air Transport Capacity Enhancement Project in terms of duration and cost. The final submission deadline had been set for January 22, 2019.

A source at the financer Asian Development Bank (ADB) said that the project called for tenders even before the funding had been approved. “As this project will end by December, the Civil Aviation Authority of Nepal (CAAN) and the ADB had agreed in principle to adjust the project’s component to another one,” the source said. “The bids were invited too early.” CAAN Director General Sanjiv Gautam, however, said they have cancelled the bids “intentionally” as they cannot fast track the project works under the existing ADB’s system. “If we wait for the ADB’s approval, it will take another five months to issue the tender for the project.”

“The government will fund the project now. Hence, we have planned to issue bids next week following Nepal’s public procurement rules,” Gautam said. “I admit we had an in principle agreement with the ADB with regards to financing the project, but it is delayed too much. The ADB has their closing in December and yet it does not assure us when they will approve the fund.” He said that CAAN is preparing for “arbitration proceedings” with the earlier contractor and arbitrators take several factors into consideration. “Hence, we don’t want to delay the project.”

An ADB official who asked not to be identified said that a mission from the bank’s headquarters was expected to arrive in Nepal on January 14 to discuss financing for the project. “So the project has been kept on hold until the mission reaches a decision on the funding.” He added that the Civil Aviation Authority and the ADB had agreed in principle to make the financing arrangement through another project’s component so the project would not be affected much. But it is expected to be delayed.

This is the fourth package of the TIA Air Transport Capacity Enhancement Project that includes supplying 2.1 million cubic metres of soil to fill the ravine on the northern side of the runway where nine new parking bays will be constructed, according to the project. The project includes construction of around 450 metres of taxiway on the northern side. The fourth package is the most critical part, and it will take at least two years to complete it, said a project official.

The project broke up the scheme into four packages in December 2016 after sending off the original contractor, Spanish company Constructora Sanjose, for non-performance. The project hit a snag at the very start as the soil to be used as filler for the expansion of the runway was not available. Work was held up for a few days after the airport was closed when a Turkish Airlines jet crash-landed in March 2015.

There were further delays due to the 2015 earthquakes and fuel shortages. The project completion deadline was first extended to 2015 and then to 2016, but after even that looked unachievable, the date was pushed back to 2020. The previous contractor extracted soil from the Pashupati quarry. A writ was filed at the Supreme Court against the extraction of soil from the holy site which issued a stay order. The Spanish company then stopped work after having removed 400,000 cubic metres of soil.

TIA recorded robust international passenger traffic growth in the first nine months of 2018 despite infrastructure bottlenecks. According to TIA, 3.1 million travellers passed through the airport during the period January-September, up 12.51 percent year-on-year.

Sangam Prasain
Sangam Prasain is Business Editor at The Kathmandu Post, covering tourism, agriculture, mountaineering, aviation, infrastructure and other economic affairs. He joined The Kathmandu Post in October 2009.