Operation hurdles pose questions about capacity of large infrastructure managers

Kathmandu, May 6

The failure to operate three large infrastructure projects – Gautam Buddha International Airport (GBIA), Pokhara International Airport (PIA) and Kathmandu Dry Port – has forced Nepal to rethink about its ecosystem for project development and operation.

These multi-billion rupees projects couldn't take off and have not shown any sign to run profitably any time soon. Experts and businesspeople have been wondering about the poor functioning of the projects of which two airports fall under the 'national pride' category even though they witnessed time overrun allowing greater time-span for planning and promotion.

The government has defined the Pride Projects as special development programmes that would be milestones in economic growth, social transformation, job creation and capital formation in the country. However, the large infrastructure plans except energy projects such as Upper Tamakoshi Hydropower have failed to achieve those targets and maintain the hopes of ordinary people.

The GBIA in Bhairahawa, about 265 km south-west of Kathmandu at the border with India, was developed at a cost of Rs. 9.8 billion. It was slated to be completed in 2017 but finished only in 2022, almost five years later. It witnessed multiple deadlines even before 2020 when the then Minister for Tourism, late Rabindra Adhikari wanted it to be ready for the Visit Nepal 2020, the programme that was ditched by the COVID-19 pandemic.

Currently, only Jazeera Airlines is conducting international flights from Middle East to GBIA. Himalayan Airlines had also started its international flight services from the airport but called it a day within a month as it couldn't find enough passengers.

Third international airport of the country was also inaugurated in Pokhara, a tourism centre 200 km west of Kathmandu, on the first day of this year eight months since the GBIA was put into service. But the Rs. 22 billion airport has got no business so far.

Likewise, the Kathmandu Dry Port, the trade infrastructure a couple of kilometres away from Kathmandu, has also failed to attract the traders and exporters to conduct their business. It only sees the entry of 2-5 containers in a day although it has all the facilities like customs office, banking counters and quarantine on its premises.

 

Missed economic opportunity

This failure in attracting business in these infrastructure projects has caused huge economic losses to the government and private sector businesses. Dozens of large-scale and many tourism-level hotels and resorts have been launched in and around Bhairahawa in hopes that the second international airport in the country would bring in thousands of passengers, tourists and pilgrims every day.

Now, hoteliers in Bhairahawa are facing hard times to manage their operation costs and have time and again demanded with the government to facilitate international flights to and from Bhairahawa.

Infrastructure expert, Dr. Surya Raj Acharya, said that this failure was the result of the government and implementing agency in establishing the rationality and ensuring economic viability of the projects.

"Take an example of airports. They are being constructed across the country without any master plan, study of passenger flow and market promotion. The GBIA and PIA couldn't perform from the beginning due to this very reason," said Dr. Acharya.

 

Negligence of authorities

It was the negligence of the concerned authorities to promote the facilities since they had to do it before the completion of the infrastructure but their inaction continued even till the extended deadlines, according to Dr. Acharya. "Why couldn't the Ministry of Tourism and the government resolve the issue of air route with India in the past eight years since the GBIA was implemented?" he asked.

However, Spokesperson of the Civil Aviation Authority of Nepal (CAAN), Jagannath Niraula, said that it takes some time for infrastructure like international airports to run in the desired capacity.

The GBIA could be a hub for pilgrims and Nepali migrant workers. It can cater to more than half of the Nepalis going abroad for work. But Bhairahawa doesn't have facilities like health check-up, visa processing, job-orientation, and manpower agencies. It seems that other agencies lack interest in facilitating the business and development.

Bad timing, poor planning

Former Director General of the CAAN, Sanjiv Gautam, said that the launching of the two international airports coincided with the global coronavirus pandemic when many airlines companies were facing hard times to operate their services. Both the government and private businesses couldn't get enough time for preparation and promotion.

But he also said that the scenario testified poor project planning and design. "If you consider about 200,000 foreign tourists and pilgrims visiting Lumbini and half of the manpower going abroad (more than 200,000), there is enough business for multiple flights every day," said Gautam. But only three international flights are happening a week from GBIA.

According to him, it is not difficult to attract airlines that make rounds in the skies of Kathmandu, Makwanpur and Dhading for 10-30 minutes to Bhairahawa which is at a distance of 25-30 minutes.

 

GBIA

Construction of the Gautam Buddha International Airport in Bhairahawa, the gateway to Lumbini – birthplace of Lord Buddha, began in June 2015 with a deadline to complete the project by December 2017. However, in the later years, the project was delayed citing the   Gorkha earthquake, Indian blockade, coronavirus pandemic and shortage of construction materials.

It officially came into operation in May last year. Although Himalayan Airlines ceased its flight to and from the GBIA, Wiz Air, Fly Dubai, Thai Airlines and Myanmar National Airlines (MNA) have shown interest in conducting flights there.

A couple of months ago, a delegation of MNA had come to Nepal to study the possibility of conducting direct flight from Dhaka to the GBIA. Earlier, in August last year, Ambassador of Myanmar, U Sein Oo, had informed that the Government of Myanmar was interested to conduct direct flights.

Likewise, former Foreign Minister, Dr. Bimala Rai Paudyal had discussed about starting direct flights from Dhaka to GBIA with Bangladeshi Ambassador to Nepal, Salahudding Noman Chowdhury in January this year. Meanwhile, several airlines companies of Thailand have also shown interest to conduct flight to Bhairahawa to tap the potential of carrying a large number of Buddhist pilgrims.

Pokhara Regional International Airport

The third international airport in the country built in Pokhara is without any international flights following the test flights by the Aero Thai.

Tourism and aviation entrepreneurs in Pokhara, Kathmandu and Bhairahawa have suggested that the agenda of air entry routes through Mahendranagar should get top priority during the upcoming India visit of Prime Minister Pushpa Kamal Dahal Prachanda.

Earlier, then Prime Minister Sher Bahadur Deuba had also discussed the issue with his Indian counterpart Narendra Modi. He had requested for additional air entry routes to Nepal through Mahandranagar, Nepalgunj and Janakpur, and also for the concurrence of near-border flight operations to smoothly operationalise the GBIA. But there has been no progress towards making this happen.

 

Expressway holdup

Executive Director of the NITDB, Ashish Gajurel, said that the dry port was developed as a complimentary project to the Kathmandu-Terai Expressway (Fast Track Road). "As the project is delayed, the dry port is facing hard times to attract trucks and containers," said Gajurel while asking, "Why would a trader come to Chobhar to unload their goods making a long round to Kathmandu via Narayangadh?"

There is a high possibility of getting more business as the customs points at the northern border with China are being operated in full capacity. The borders with China have been shut or run in a limited capacity with about a dozen of containers passing the borders during the coronavirus pandemic.

Kathmandu Dry Port

The Kathmandu Dry Port, also known as the Chobhar Inland Clearance Depot (ICD), was expected to facilitate trade with swift clearance of containers, reduce the load at the Birgunj and Larcha ICD, and to promote import and export business.

The government had signed an agreement with the World Bank for financial support in 2013 but it took about three-and-a-half years to transfer the property from the erstwhile owner Himal Cement to the Nepal Intermodal Transport Development Board (NITDB).

Construction of the dry port had begun in August 2018 and was completed in July 2021. It has 65,000 square metres space, enough to accommodate 500 containers and 500 trucks. It has facilities like quarantine, security, operator company office, banks and other essential services, three warehouses, three appraisal shades, stuffing and de-stuffing shade, weighing machines, electricity sub-station, and boundary light.

The project was supposed to complete by June 2020 but delayed by a year due to COVID-19 pandemic and protests by the local people. Even worse, the project was inaugurated 10 months later in April 2022.

Inaugurating the facility, then Prime Minister Sher Bahadur Deuba, had said that it would facilitate trade in a transparent manner and promote sustainable development through trade facilitation.

Recently, the NITDB has developed an internal terminal to allow the trucks and containers other than coming from other countries to unload and warehouse the goods. Gajurel said that although the ICD is doing about 20-25 per cent of its total business capacity, the internal terminal has given relief in managing the operation costs. The NITDB is also holding regular discussions with the businesspeople including the freight forwarders, and other stakeholders. 

 Published in The Rising Nepal daily on 7 May 2023.