Korean Company to be compensated by Government for the SIA report


Korean Company to be compensated by Government for the SIA report

January 6, 2017- Kathmandu

The Landmark Worldwide Company (LMW) of Korea which had conducted feasibility study of the Second International Airport (Nijgadh) will be compensated by the government as it has decided to handle the project itself.

The Korean company has decided not to charge the government for the study it did earlier if it got the contract to construct the airport. Tourism Ministry earlier asked LMW to present their paperwork and provide payment.

The company had conducted the DFS at a proce of $3.55 million and succumbed it to the government in April 2012. It received the contract to conduct the study in March 2010.

The report suggested that the airport underneath the ‘build own operate and transfer’ (Boot) model. It has anticipated a price label of Rs65 billion for the first phase, Rs7.78 billion for the second phase and Rs8.79 billion for the third phase.

As per the agreement engaged between the government and LMW, the sum of repayment needs be authenticated by an autonomous assessor. The process will be introduced after the company submits its documents.

The move to repay the company trails the government’s plan to allocate the Civil Aviation Authority of Nepal (Caan) to concoct a fresh detailed project report (DPR).

Recently, Tourism Minister Jeevan Bahadur Shahi had informed a combined meeting of the parliamentary Finance and Development committees that they had presented the procedure to formulate another DPR of the proposed airport project. He informed representatives that the government would also imitate LMW’s report and make use of its chief contents.

But it is still not decided on who will take the responsibility for compensation to the LMW. If CAAN decides to take the DFS, it will make the imbursement for the company and if not, the government should do the payment and also make proposal to present in the Cabinet.

The premeditated airport in Nijgadh, situated 175 kilometres south of Kathmandu, will range over 80 square kilometres, which will make it the principal airport in South Asia in terms of area. As per CAAN’s new financial approximation, the planned airport can be built at a cost of Rs 121 billion.

An initial internal financial valuation by CAAN has planned building a 4,000-metre runway while LMW’s plan has projected a 3,600-metre runway. Likewise, CAAN has proposed constructing a 100,000-square-metre international passenger terminal against the Korean company’s proposal for a 75,000-square-metre building and many more changes that CAAN has proposed different from LMW’s report.


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