The Civil Aviation Authority of Nepal (CAAN), which has been accused of being unable to operate the Pokhara Regional International Airport (PRIA) and Gautam Buddha (Bhairawa) International Airport (GBIA) built with loans, has proposed allowing four airports to be run under the Public Private Partnership (PPP) model.
Without any detailed study and preparation, CAAN has decided to hand over the operation of the international airports in Kathmandu, Pokhara and Bhairahawa and the construction of the Nijgadh International Airport to the private sector.
In the absence of international flights from GBIA and PRIA, the relevance of Nijgadh International Airport, which is being built in Bara, cannot be found.
While CAAN has been criticized for not being able to remove Nepali Airlines from the blacklist of the European Union (EU), people have alleged that CAAN has brought a new proposal to change the subject. Similarly, CAAN has also been criticized for bringing the concept of PPP model to give the business worth Rs 12 billion of the Tribhuvan International Airport (TIA) to a private group.
There is no example of successful implementation of any large project in Nepal till now that is based on the PPP model. CAAN has made a ‘combo package’’ of four airports in the PPP model by connecting the Nijgadh International Airport, which has to be built in case international flights are not available from the constructed airports.
There is no international flight from PRIA and GBIA despite the high number of air travelers at TIA, raising questions about the justification of billions of rupees investment made by the government. At TIA, there is a high traffic of air passengers. This airport earned about Rs 12 billion last year. Everyone has their eyes on this business.
A senior official of the Ministry of Culture, Tourism and Civil Aviation said that the ‘combo package’ of four airports was made at the will of interest groups. “Since the GBIA and PRIA are not running smoothly, there is no way to pay the interest on the loans taken for the construction of these airports,” said the official.
The official said that this package may have come at the will of ‘vested interest groups’ eyeing the business worth Rs 12 billion of TIA. “Other airports may be connected to take over TIA which is in profit,” said the official.
It is alleged that CAAN Director General Pradeep Adhikari brought a new proposal to change the subject after Nepal Airlines was not removed from the blacklist of the EU. Without a detailed study, on the proposal of the director general of the Authority, the board of directors of the Authority sent the decision to allow the private sector to build and operate the airport to the Ministry of Culture, Tourism and Civil Aviation.
Currently, the chairman of the Board of Directors of the CAAN is Tourism Minister Sudan Kirati. CAAN officials said that a detailed study will be done after the government approves the PPP model.
Although the PPP model has been proposed by CAAN for effective management, there has not been a detailed study on it. Former director general of CAAN Sanjeev Gautam said that if the airports are to be operated and built under the PPP model, the modality should be made public in a transparent manner. “It should be announced transparently in which modality it will be given,” he said.
Gautam said that even though the PPP model is good, it should be clear about airport construction, operation and management.
According to CAAN officials, the decision was taken by the Authority because there was a voice that the private sector should be allowed to build and operate airports. CAAN Spokesperson Jagannath Niraula said that a new proposal of PPP model has been sent to the ministry to operate and build airports in a competitive manner.
“Foreign investors will come if we adopt the PPP model,” Niraula said. “There are many examples of foreign countries’ airports operating under the PPP model. There has been improvement in many other areas due to the involvement of the private sector,” he said adding, “We are trying to practice new things.”
Even if the proposal is made by the Ministry, the process will move ahead after the decision of the Council of Ministers. Prime Minister Pushpa Kamal Dahal announced the achievements and plans of one year and said that the international airport is ready to be built under the PPP model. Based on that, CAAN took this decision.
There is also concern that the country will fall into a debt trap if the airports built by the government do not operate smoothly. A loan of about Rs 28 billion has been taken from China to build PRIA.
Similarly, around Rs 9.5 billion have been invested with Asian Development Bank loan, OPEC fund and Nepal government to build GBIA. Since there are no international flights operating from that airport, it has become difficult to pay the operating expenses and loan interest.
While the government has not been able to make a plan for the existing infrastructure, the relevance of Nijgadh International Airport project, which is estimated to cost more than Rs 500 billion, is also being questioned.
On May 25, 2022, the full bench of the Supreme Court overturned the government’s decision to build an international airport at Nijgadh in Bara. However, the government has decided to build an airport in Nijgadh based on the suggestions of the expert group formed under the coordination of air infrastructure expert Birendra Bahadur Deuja.
Many controversies about Nijgadh remain unanswered till now. Former president of Nepal Association of Tour and Travel Agents (NATTA) Bhola Bikram Thapa has been claiming that Nijgadh International Airport will be the next white elephant.
