Airport tax money not being spent as intended: Tourism MinistryThe Tourism Ministry said Tribhuvan International Airport had not been spending the money collected as airport development tax as intended, warning that the scheme’s term may not be extended if it did not produce a strategic working plan.
The Tourism Ministry said Tribhuvan International Airport had not been spending the money collected as airport development tax as intended, warning that the scheme’s term may not be extended if it did not produce a strategic working plan.
On July 17, 2014, the Finance Ministry allowed Tribhuvan International Airport to impose an airport development tax of Rs1,000 per departing passenger for five years. The tax is included in the price of the airline ticket.
The money is deposited in the Airport Development Fund, and should be used to improve the facilities at the airport. Tribhuvan International Airport has collected Rs7.59 billion in airport development taxes in the last four years. The term of the Airport Development Fund ends in mid-July.
Responding to Tribhuvan International Airport’s request to permit it to continue collecting taxes for another five years, the Tourism Ministry said that it did not abide by any of the provisions set by the Finance Ministry while utilising the fund. “When we reviewed the fund, we discovered it had not been utilised for the purpose it was raised for,” said a senior ministry official. “The Finance Ministry has set four-five conditions to spend the money. But the fund has not been used for development activities.”
Tribhuvan International Airport has spent 70 percent of the money for land acquisition. Expenditure stood at 0.22 percent of the money deposited in the Airport Development Fund in the fiscal year 2014-15, 0.79 percent in 2015-16 and 7.86 percent in 2016-17. Most of the money was used for land acquisition in 2017-18. A small portion of the fund was used to pay consultant fees, which is against the mandate. “It’s against the rules of the Airport Development Fund as it should be utilised for the airport’s development,” the official said.
When the Airport Development Fund was set up, it was agreed that Tribhuvan International Airport should prepare a five-year strategic working plan to spend the fund. “The airport has not prepared a strategic working plan as of date,” he said, adding that the government was not against creating the fund, but it should be utilised for the stated purpose,” he said.
“We have recommended that if Tribhuvan International Airport wants to extend the term of the fund, it should unveil its strategic working plan first and spend the money in priority areas.” Besides the Airport Development Fund, the airport collects Rs1,130 separately from every departing passenger as passenger service charge.
The Civil Aviation Authority of Nepal said it would start rehabilitating the five-decade-old runway at the airport by April, which frequently sees formation of cracks. The aviation authority has allocated Rs3.5 billion for the runway rehabilitation project, and it will dip into the fund to finance it.
International passenger traffic at Tribhuvan International Airport rose 11.70 percent to 4.34 million in 2018.