Nepal : Civil Aviation Sector Improvement Program
The proposed policy-based loan (PBL) to Nepal for the Civil Aviation Sector Improvement Program will provide budget support for civil aviation sector reforms in restructuring of the current Civil Aviation Authority of Nepal (CAAN) and strengthening of its oversight functions, management accountability, and operational efficiency. The program is consistent with Asian Development Bank (ADB) country partnership strategy for Nepal, 2020-2024. The program is aligned with ADB's Strategy 2030 operational priorities of strengthening governance and institutional capacity (operational priority 6) and fostering regional cooperation and integration (operational priority 7). The program will support gender quality and social inclusion initiatives of the implementing agency as well.
Project Details
-
Project Officer
Nakai, Kanzo
South Asia Department
Request for information -
Country/Economy
Nepal -
Sector
- Transport
Related Projects
| Project Name | Civil Aviation Sector Improvement Program | ||||||||
| Project Number | 38349-029 | ||||||||
| Country / Economy | Nepal |
||||||||
| Project Status | Active | ||||||||
| Project Type / Modality of Assistance | Loan Technical Assistance |
||||||||
| Source of Funding / Amount |
|
||||||||
| Operational Priorities | OP2: Accelerating progress in gender equality OP6: Strengthening governance and institutional capacity OP7: Fostering regional cooperation and integration |
||||||||
| Strategic Agendas | Inclusive economic growth Regional integration |
||||||||
| Drivers of Change | Gender Equity and Mainstreaming Governance and capacity development Private sector development |
||||||||
| Sector / Subsector | Transport / Transport policies and institutional development |
||||||||
| Gender Equity and Mainstreaming | Some gender elements | ||||||||
| Description | The proposed policy-based loan (PBL) to Nepal for the Civil Aviation Sector Improvement Program will provide budget support for civil aviation sector reforms in restructuring of the current Civil Aviation Authority of Nepal (CAAN) and strengthening of its oversight functions, management accountability, and operational efficiency. The program is consistent with Asian Development Bank (ADB) country partnership strategy for Nepal, 2020-2024. The program is aligned with ADB's Strategy 2030 operational priorities of strengthening governance and institutional capacity (operational priority 6) and fostering regional cooperation and integration (operational priority 7). The program will support gender quality and social inclusion initiatives of the implementing agency as well. | ||||||||
| Project Rationale and Linkage to Country/Regional Strategy | Nepal has maintained a traditional civil aviation sector structure whereby functions of regulation, safety oversight, and service provision are absorbed by one entity, Civil Aviation Authority of Nepal (CAAN). The roles of regulator and service provider lodged in a single organization create a source of conflict of interest. The regulatory function may not provide adequate oversight on service provision and may raise operating costs and result in suboptimal performance as a service provider. There are also repercussions on aviation safety, which have been noted and highlighted by international aviation agencies. The International Civil Aviation Organization states in its Global Aviation Safety Plan (Appendix A of Organizational Challenges Roadmap) that an independent regulatory authority should be established and maintained, which includes separation of oversight functions from service provision functions where these exist within the authority. The European Commission has banned Nepali airlines from flying to the European Union because of a lack of safety oversight by the aviation authority of Nepal. To remedy this situation, the Nepal Aviation Safety Plan has placed the separation of the CAAN as a priority measure to comply with the international standards. The change of the governance structure in the civil aviation sector is the most fundamental and imminent reform requirement. The government is in the process of enacting new civil aviation legislation, which were originally drafted with the assistance of the consulting services under the ADB-funded Air Transport Capacity Enhancement Project. The main objective of the new bills is to reform the civil aviation sector in Nepal by bifurcating the roles of the regulator and the operator (CAAN) into separate entities. | ||||||||
| Impact | Safe, reliable, standard, easily available, accessible for the general public, sustainable, and effective air services developed Aviation safety performance in Nepal enhanced |
||||||||
| Project Outcome | |
|---|---|
| Description of Outcome | Nepal's aviation safety oversight capabilities and operational efficiencies strengthened |
| Progress Toward Outcome | |
| Implementation Progress | |
| Description of Project Outputs | Legal framework of the civil aviation reforms approved Independent regulatory body for the civil aviation established and functionalized Independent service provider for the civil aviation established and functionalized |
| Status of Implementation Progress (Outputs, Activities, and Issues) | |
| Geographical Location | Nation-wide |
| Safeguard Categories | |
|---|---|
| Environment | C |
| Involuntary Resettlement | C |
| Indigenous Peoples | C |
| Summary of Environmental and Social Aspects | |
|---|---|
| Environmental Aspects | |
| Involuntary Resettlement | |
| Indigenous Peoples | |
| Stakeholder Communication, Participation, and Consultation | |
| During Project Design | |
| During Project Implementation | |
| Business Opportunities | |
|---|---|
| Consulting Services | ADB will engage the consultants following the ADB Procurement Policy (2017, as amended from time to time) and its associated project administration instructions and/or staff instructions. |
| Procurement | Not Applicable. |
| Responsible ADB Officer | Nakai, Kanzo |
| Responsible ADB Department | South Asia Department |
| Responsible ADB Division | Transport and Communications Division, SARD |
| Executing Agencies |
Ministry of Finance |
| Timetable | |
|---|---|
| Concept Clearance | 27 Nov 2019 |
| Fact Finding | 17 Mar 2020 to 23 Mar 2020 |
| MRM | 22 Apr 2020 |
| Approval | 30 Jun 2020 |
| Last Review Mission | - |
| Last PDS Update | 27 Sep 2022 |
Loan 3948-NEP
| Milestones | |||||
|---|---|---|---|---|---|
| Approval | Signing Date | Effectivity Date | Closing | ||
| Original | Revised | Actual | |||
| 30 Jun 2020 | 09 Jul 2020 | 13 Jul 2020 | 30 Jun 2023 | - | - |
| Financing Plan | Loan Utilization | ||||
|---|---|---|---|---|---|
| Total (Amount in US$ million) | Date | ADB | Others | Net Percentage | |
| Project Cost | 50.00 | Cumulative Contract Awards | |||
| ADB | 50.00 | 27 Sep 2022 | 25.00 | 0.00 | 50% |
| Counterpart | 0.00 | Cumulative Disbursements | |||
| Cofinancing | 0.00 | 27 Sep 2022 | 25.00 | 0.00 | 50% |
TA 6531-NEP
| Milestones | |||||
|---|---|---|---|---|---|
| Approval | Signing Date | Effectivity Date | Closing | ||
| Original | Revised | Actual | |||
| 30 Jun 2020 | 24 Jul 2020 | 24 Jul 2020 | 30 Sep 2022 | 30 Sep 2023 | - |
| Financing Plan/TA Utilization | Cumulative Disbursements | |||||||
|---|---|---|---|---|---|---|---|---|
| ADB | Cofinancing | Counterpart | Total | Date | Amount | |||
| Gov | Beneficiaries | Project Sponsor | Others | |||||
| 500,000.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 500,000.00 | 27 Sep 2022 | 0.00 |
Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.
The Access to Information Policy (AIP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.
The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.
In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.
| Title | Document Type | Document Date |
|---|---|---|
| Loan Agreement (Ordinary Operations [Concessional]) for Loan 3948-NEP: Civil Aviation Sector Improvement Program | Loan Agreement (Ordinary Resources) | Jul 2020 |
| Civil Aviation Sector Improvement Program: Report and Recommendation of the President | Reports and Recommendations of the President | Jun 2020 |
| Civil Aviation Sector Improvement Program: Technical Assistance Report | Technical Assistance Reports | Jun 2020 |
| South Asia Subregional Economic Cooperation Airport Capacity Enhancement Sector Development Program: Concept Paper | Concept Papers | Nov 2019 |
| South Asia Subregional Economic Cooperation Airport Capacity Enhancement Sector Development Program: Initial Poverty and Social Analysis | Initial Poverty and Social Analysis | Nov 2019 |
Safeguard Documents See also: Safeguards
Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.
None currently available.
Evaluation Documents See also: Independent Evaluation
None currently available.
Related Publications
None currently available.
The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.
Requests for information may also be directed to the InfoUnit.
Tenders
Contracts Awarded
Procurement Plan
None currently available.