Nepal: Air Transport Capacity Enhancement Project (formerly Civil Aviation Airport Development Project)

Transport - Air transport

The Air Transport Capacity Enhancement Project will enhance safety and capacity at Tribhuvan International Airport (TIA) in Kathmandu and three remote domestic airports--Lukla, Rara, and Simikot. TIA's airfield side infrastructure will be reconfigured and upgraded to international safety standards, including provision or construction of (i) about 1,400 meters (m) of new main taxiways and link taxiways, (ii) runway end safety area and extension, (iii) runway approach lights, (iv) an instrument landing system localizer, (v) an uninterrupted power supply system for essential airfield and security area lights, (vi) air traffic communication equipment,(vii) additional international and domestic aircraft parking apron area, and (viii) upgrading of rescue and fire fighting system. TIA's terminal infrastructure will be rehabilitated with the existing international terminal refurnished and upgraded, and a new temporary domestic terminal of about 10,000 square meters (m2) constructed. Basic safety improvements at the three remote domestic airports include a visual approach guidance system and abbreviated precision approach path indicator at Lukla airport, and runway threshold identifiers and runway end lights, air traffic control equipment, and meteorological equipment at Simikot and Rara airports.

The Project will also improve overall sector management by implementing a 3-year capacity development program for the Civil Aviation Authority of Nepal (CAAN). CAAN's organizational and management capacity will be strengthened by updating the existing regulations, developing a strategy to adapt the regulatory framework based on international standards, improving human resources development, upgrading the financial and management information system, implementing a systematic maintenance program, and identifying viable opportunities for private sector participation for future airport infrastructure development and maintenance.

Due to the challenging terrain in Nepal, air transport is an important part of the country's overall transport system, providing access to many remote towns and villages in the mountainous areas. Nepal's natural landscape and cultural heritage offer tourism development potential. A safe and reliable air transport system is vital to achieving the Government's tourism development targets, and therefore receiving the economic benefits. TIA is the country's only international airport and safety concerns urgently need to be addressed. TIA's airside facilities, runways, taxiways, apron, and communication navigation surveillance equipment are not fully compliant with international safety standards and recommended practices. The Project will provide improvements to address the current safety issues and capacity constraints.

The domestic airports in Lukla, Rara, and Simikot serve remote areas that are otherwise inaccessible by road, and air transport is an essential mode of communications for both the local communities and tourists. These airports will support tourism development and need urgent rehabilitation and upgrading. The Project will upgrade and improve communication equipment, visual approach aids, and weather equipment.

CAAN is responsible for the administration of civil aviation in Nepal and is essentially functioning well. However, further institutional enhancement, especially in its operational efficiency and management capacity, is necessary to effectively handle the expected demand of greater air transport traffic in the medium term. Overall, the Project is to address major factors hindering the future growth of the air transport subsector by improving safety to international standards, easing capacity constraints, and enhancing CAAN's organizational effectiveness.

With the completion of contract ICB-02 for supply of communication navigation and surveillance / air traffic management (CNS/ATM) equipment at TIA and Lukla airports in September 2015 (including defect liability period); safety aspect has been improved; particularly air to ground communication and meteorological facilities at TIA and visual guidance at Lukla.

ICB-01 contract with a scope to improve airside and landside infrastructure to improve capacity of TIA, and safety of Simikot and Rara was terminated on 27 Dec 2016 at progress of 17%. No significant achievement.

On institutional capacity building of CAAN, majority of the tasks have been completed including a drafting of new Civil Aviation Act separating the regulation and operation functions in civil aviation in Nepal. The act is approved by ICAO, International relations and legal department of CAAN and CAAN board; now under inter-ministerial review.

The Project outputs are as follows:

(i) for TIA: airside infrastructure reconfigured to meet international safety standards, landside infrastructure rehabilitated and improved for larger capacity, and the CNS/air traffic management equipment upgraded;

(ii) for remote domestic airports at Lukla, Rara, and Simikot: basic safety infrastructure improved; and

(iii) for CAAN: organizational and management capabilities enhanced.

(i) The ICB-01 contract (Airside infrastructure development and landside terminal improvement at TIA, Simikot and Rara Airports) meant for this output was terminated at progress of 17%. No significant achievement however, CNS/ATM equipment are upgraded and two baggage handling system are installed at TIA. A portion of outstanding works of ICB-01 are in procurement process under three NCB packages (IFB published in 6 March 2017). Rest works is under packaging process.

(ii) Visual guidance at Lukla airport has been improved with installation of VAGS and A-PAPI. Snow plough and Fire extinguishers are delivered at Simikot and Rara airports.

Supply of AFL is completed and supply of CNS/ATM equipment is partially completed.

(iii) Overall progress of the component is 95%. Components on planning, business planning, private sector participation, enhancing non-aeronautical revenues, HRD, restructuring, and legal have been substantially completed. Responsibility of MIS and computerization component, which has been delayed due to need of rebidding, has been presently taken by CAAN and it has planned to implement in phase wise manner.

All consultants under the Project were recruited in accordance with ADB's Guidelines on the Use of Consultants. For detail design and supervision (DSC), a firm of international consultants was recruited using quality- and cost-based selection procedures, with full technical proposal and a 90:10 proportion of quality to cost. For the development and implementation of the capacity development program, a firm of international consultants was recruited using quality- and cost-based selection procedures, with full technical proposal and a 90:10 proportion of quality to cost. Under grant component of the Project 2 consulting packages have already been procured and are in different stages of implementation.

The DSC contract will expire on March 2017 and no longer extended for construction supervision support. EoI for recruitment of new construction supervision consultant (CSC) is under preparation. The CSC will be recruited following Quality and Cost Based Selection (QCBS) method using full technical proposal.

For development and implementation of the capacity development program, a firm of international consultants was recruited using quality- and cost-based selection procedures, with full technical proposal and a 90:10 proportion of quality to cost. The physical progress of the consulting package is about 95%. As CAAN has taken responsibility for implementation of MIS and Computerization components under capacity development program, the consulting service contract related to this program will be closed soon.

All procurements to be financed under the Project were carried out in accordance with ADB's Procurement Guidelines updated from time to time. International competitive bidding (ICB) was used for procurement of works estimated to cost more than $1.0 million and for goods estimated to cost more than $500,000.

Under loan component of the Project 1 works package (ICB-01) and 1 goods package (ICB-02) have been procured. Goods package is completed but works package is terminated.

Re-procurement of outstanding works will also be carried out in the same way however, for International competitive bidding (ICB) for procurement of works, a threshold of $10.0 million will be adopted as per the recent modification.