The Civil Aviation Authority of Nepal has moved to build hangars large enough to hold aircraft of the size of the Airbus A330 at Tribhuvan International Airport.

The hangar project is one of the two planned improvement schemes at Kathmandu’s airport that ground to a halt after potential contractors were rejected.

After getting the go-ahead from the financier Asian Development Bank, the civil aviation body has decided to award the Rs4.51 billion hangar area development contract to a joint venture of AVIC-KDN Airport Engineering Co and China Civil Engineering Construction Corporation.

The notice of intention for award of contract was issued on February 19. “We will issue the letter to the contractor next week,” Dipendra Shrestha, chief of the Airport Capacity Enhancement Project, told the Post.

The second component of the airport improvement project—extending the parallel taxiway towards Runway 02 or the Koteshwor side—has been dropped for lack of eligible bidders.

Extending the parallel taxiway will allow aircraft to reach the southern end and keep the runway free. As there is no taxiway on the southern part of the runway, aircraft need to occupy the runway for 2–3 additional minutes for takeoff and landing, particularly during peak hours.

“Bids for the second component will be re-invited soon,” said Shrestha.

Under the hangar area development plan, the existing Nepal Airlines and Nepal Army hangars will be relocated and new hangars will be built on the eastern side of the runway that can hold large aircraft like the Airbus A330.

This will expedite the implementation of the three-year Tribhuvan International Airport master plan and enhance aviation safety, officials said.

In October last year, the Asian Development Bank had communicated to Nepal's civil aviation authority that it had blacklisted three top Chinese construction firms for violating integrity rules, and barred them from participating in Nepal’s key airport infrastructure development project.

The Office of Anticorruption and Integrity of the Asian Development Bank threw the book at the three state-backed companies—China CMC engineering Company, Northwest Civil Aviation Airport Construction Group and China Harbour Engineering Company—for varied offences.

Nearly two dozen firms had purchased bid documents to vie for the Rs10 billion Tribhuvan International Airport ultimate development project in Kathmandu, but only four Chinese companies submitted them.

Among the four hopefuls are two of the firms blacklisted by the Manila-based multilateral funding agency—China CMC Engineering Company and a joint venture of Northwest Civil Aviation Airport Construction Group and China Harbour Engineering Company, according to top officials at the Civil Aviation Authority of Nepal.

China CMC Engineering Company, which is currently constructing Pokhara International Airport, was put on the Asian Development Bank’s Sanctions List until April 2022. The firm has been blacklisted in an Asian Development Bank-funded project in Pakistan.

China CMC Engineering won the construction contract for the Pokhara airport project in May 2014, and work started in July 2017. The government signed a $215.96 million soft loan agreement with China EXIM Bank in March 2016 to finance the airport built on an engineering procurement and construction model.

Northwest Civil Aviation Airport Construction Group, which is currently working on Gautam Buddha International Airport in Bhairahawa, has been put on an open-ended sanctions list, which means no sanction release date has been mentioned, the unnamed official said.

Northwest was blacklisted for submitting “fraudulent” documents in 2015 while constructing the airport, the official said. The Civil Aviation Authority of Nepal had awarded the Rs6.22 billion civil works component, the first package, to Northwest in November 2013.

China Harbour has been put on the Sanctions List until 2023. The Bangladesh government had blacklisted China Harbour in 2018 for trying to bribe a roads secretary.

The other short listed Chinese companies are a joint venture of AVIC-KDN Airport Engineering Co and China Civil Engineering Construction Corporation and China Overseas Engineering Group or COVEC, a subsidiary of China Railway Group.

“The project short listed one of the two companies for a hangar area development component on the eastern side of the runway,” said Shrestha.

Of the three short listed companies for the taxiway component, two were put in the Asian Development Bank’s sanction list and one failed to renew its bid bond or security amount. “Hence, all three companies were deemed ineligible for the project,” said Shrestha.

As part of the ultimate development of Tribhuvan International Airport by 2028, the Asian Development Bank is investing Rs10 billion under the Airport Capacity Enhancement Sector Development Programme", which includes extending the parallel taxiway towards Runway 02 or the Koteshwor side, and building two hangar aprons to relocate Nepal Airlines and Nepal Army hangars from the western side of the runway.

The ADB and the Nepal government signed a $150 million concessional loan to improve the capacity of Tribhuvan International Airport and Gautam Buddha Airport in Nepal in December 2020.

Under Nepal's procurement laws, at least three companies need to participate in the tender. But the aviation authority said that under Asian Development Bank rules, two companies are enough..

Nepal plans to upgrade Kathmandu airport which is currently the country's sole international gateway.

Asian Development Bank documents say that taking into account the planned infrastructures for ultimate development, the maximum runway capacity of Tribhuvan International Airport will accommodate 42 aircraft movements per hour in mixed mode operation on Runway 02, enabling 187,000 aircraft movements per year.

To enable capacity enhancement of the runway and create space for additional international aprons, the Airport Capacity Enhancement Sector Development Programme has envisaged extending the taxiway and relocating the Nepal Airlines and Nepal Army hangars.

The construction and relocation of the two hangers will cost $75 million while $65 million has been estimated for the construction of a dedicated domestic apron.

Combined with limited airspace in Kathmandu Valley, the insufficient capacity of airside facilities forces aeroplanes to remain on hold in the sky, leading to frequent flight delays. For landside facilities, the current international terminal building handled 4.3 million passengers in 2018, beyond its annual capacity of 3.2 million.

Heavy congestion and lower quality of services are observed during peak hours; the international terminal building handled more than 2,200 passengers per hour, about 70 percent more than its per-hour capacity of 1,350. The number of international passengers is projected to further increase to 6.1 million by 2028.

The Civil Aviation Authority said that it would initiate the construction of a new international terminal building after relocation of the hangars and domestic aprons to clear the planned construction site which will cost about $500 million.

In April 2019, Nepal had submitted a request to the Asian Development Bank to finance construction of the new international terminal building. The bank said that financing for the international terminal building would be considered in a separate loan.