Appeal against termination by SanJose Constructora rejected (CAAN)
Kathmandu – 18 December 2016
The Spanish firm, Constructora Sanjose which has been the contractor for the Tribhuvan International Airport (TIA) improvement project had appealed in the Kathmandu District Court which rejected its appeal on Friday.
The defendants were The Civil Aviation Authority of Nepal (Caan), TIA Improvement Project Directorate and Japan Airport Consultants Inc, in association with GEOCE Consultants.
A separate summon was also filed by the Spanish firm for which The Patan High Court on Thursday gave decision in favor of CAAN which has decided to seize the advance payment guarantee of Rs. 1.05 billion and a performance bond of Rs. 600 million whose hearing is scheduled on Monday.
Last week, a notice of termination was issued by CAAN bidding goodbye to Spanish firm as being the acting partner for the project funded by Asian Development Bank (ADB).
Caan said it has decided to call fresh tenders to recommence the runway extension and terminal building works within one and a half months. The contractor has demanded Rs1.17 billion in compensation. However, Caan engineers have projected that the compensation will come to Rs90-100 million if the agreement is ended. After the conclusion of the project, TIA will be able to lever more than 5.85 million passengers yearly and house bigger aircraft.