Loan agreement paves the way for Pokhara int'l airport project

POKHARA, March 22: The soft-loan agreement with China signed on Monday has paved the way for construction of a regional international airport in Pokhara.

The estimated cost of the project is Rs 21.47 billion.

Though China Exim Bank had signed an agreement with Ministry of Finance two years ago to finance the project, the project is not gaining momentum as the two sides had not signed final loan agreement.

The government has already selected a Chinese contractor to develop the project.

Pradeep Adhikari, chief of the project, said they will now be able to begin construction work immediately as the final loan agreement has been signed.

Locals of Pokhara are hopeful that the signing of final loan agreement will give momentum to construction work. Som Bahadur Thapa, chairman of Pokhara Tourism Council, said the loan agreement has raised hope among Pokhara locals that their dream project will see light of the day.

Civil Aviation Authority of Nepal (CAAN) has already signed agreement with Chinese contracting firm China CMC Engineering to develop the project. The project will be developed in EPC (Engineering, Procurement and Construction) modality which means there won't be any modification in contractual provisions. The airport will support landing and take-offs of aircraft as big as Boeing 757 and Airbus 320.

The land acquisition process for the project has nearly been completed. Similarly, its Environment Impact Assessment (EIA) Report has also been approved by the Ministry of Environment. "

"We have already distributed compensation to owners of around 90 percent of land acquired for the projec"," Adhikari said, adding" "We have not been able to distribute compensation to landowners who are residing in foreign countrie"."

The project has to distribute compensation for 520 of 629 ropani land acquired for the project. It has distributed Rs 2.18 billion as compensation to land owners so far.

Ananda Raj Mulmi, former president of Federation of Nepalese Chambers of Commerce and Industry (FNCC) said that the government should now expedite work in the project site.

CAAN officials said construction work will begin once CAAN signs an agreement with the government. They say the government will charge CAAN interest in range of 5-7 percent.

CHINA EXIM TO CHARGE 1.5 PERCENT INTEREST

China Exim Bank will charge 1.5 percent interest on the soft loan. The two sides had held different round of discussions to finalize the interest rate. The decision to this effect was signed during Prime Minister KP Sharma Oli's China visit.

Ministry of Finance has signed concessional loan agreement worth Rs 16.87 billion with China Exim Bank. Similarly, Exim bank won't charge any interest on another Rs 5.87 billion, according to a source at the Ministry of Finance.

Similarly, another framework agreement has been signed between Nepal and China to implement loan agreement and develop the project.