High level officials of CAAN informed myrepublica.com that the agency has started working on a number of possible modalities aimed at contracting out major activities that it handles to private parties. [break]
"The purpose of this homework is to focus CAAN on core business -- regulating functions of airports -- by dropping the role of service provider," said the source. The proposal to focus only on regulatory function is as per the growing international practices, added the official.
The entire motive behind the proposed management handover of domestic airports to private sector is not only to change its role but also to mobilize resources needed to make additional investment to improve services that it has been providing to airline operators.
"The groundwork for proposed management handover is going on smoothly and we expect to make policy announcement related to the proposal from the beginning of 2010/11,” the official added.
The government so far has made investments worth billions of rupees to build countrywide network of airport infrastructure in 53 places. However, the return on investments, which is disturbingly low till now, is something that is compelling the aviation regulator to look into alternate means for financial sustainability, the official said.
Officials at the CIAA further said that the proposed management handover might be affected by the conditions that the government has agreed while taking loans from Asian Development Bank for the ongoing expansion of country´s only international airport, Tribhuvan international Airport, and two other domestic airports - Simikot and Dolpa.
"Some conditions of the loan agreement don´t allow the government to handover the management of the domestic airports to private sector," said an official.
The government has agreed to receive $85 million loan from ADB for the expansion works of the TIA and two domestic airports.
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