KATHMANDU: The government has finally signed agreement with China CAMC Engineering Co to build the much talked about Pokhara airport. The Civil Aviation Authority of Nepal (CAAN) on Thursday signed commercial agreement with the Chinese firm to build the airport at US$ 215.96 million under engineering, procurement and construction (EPC) contract.
The project is targeted to upgrade existing Pokhara airport to regional international airport. For CAMC which was also the lowest bidder for the project, quoting more than the government estimated cost, the airport construction project had remained on hold since July 2012. CAAN officials said that they signed the contract with the Chinese company after the latter agreed to carry out the project in revised cost.
“Commercial agreement is signed at US$ 215.96 million which is a revised cost,” said Birendra Shrestha, deputy director general and spokesperson of the CAAN. He added that the project is estimated to start within three months after signing of loan contract with Export-Import Bank of China.
The government has been planning to borrow around US $ 145 million in soft loans from the Export-Import Bank of China to fund the project. CAAN officials said that during the agreement signing ceremony, CAAN has also requested Chinese Ambassador also present in the programme to fund the project through grant instead of loan.
Since the project was being executed in the EPC model, it would take one year for the contractor to prepare drawing and detain designs after signing of loan contract to fund the project, according to the CAAN.
Likewise, it is estimated to take three years after completion of design work to bring the airport in operation.
In 2012, when the government had called tender to build the airport, CAMC had quoted US$ 306 million which is almost double the estimation of the government US$ 156 million excluding 13 per cent value added tax (VAT). Later, an independent committee based on its study had calculated that the airport construction cost at US $ 215.96 excluding VAT.
The project is targeted to upgrade existing Pokhara airport to regional international airport. For CAMC which was also the lowest bidder for the project, quoting more than the government estimated cost, the airport construction project had remained on hold since July 2012. CAAN officials said that they signed the contract with the Chinese company after the latter agreed to carry out the project in revised cost.
“Commercial agreement is signed at US$ 215.96 million which is a revised cost,” said Birendra Shrestha, deputy director general and spokesperson of the CAAN. He added that the project is estimated to start within three months after signing of loan contract with Export-Import Bank of China.
The government has been planning to borrow around US $ 145 million in soft loans from the Export-Import Bank of China to fund the project. CAAN officials said that during the agreement signing ceremony, CAAN has also requested Chinese Ambassador also present in the programme to fund the project through grant instead of loan.
Since the project was being executed in the EPC model, it would take one year for the contractor to prepare drawing and detain designs after signing of loan contract to fund the project, according to the CAAN.
Likewise, it is estimated to take three years after completion of design work to bring the airport in operation.
In 2012, when the government had called tender to build the airport, CAMC had quoted US$ 306 million which is almost double the estimation of the government US$ 156 million excluding 13 per cent value added tax (VAT). Later, an independent committee based on its study had calculated that the airport construction cost at US $ 215.96 excluding VAT.
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