Nepal : South Asia Subregional Economic Cooperation Airport Capacity Enhancement Project

Sovereign Project | 38349-031

Project Name South Asia Subregional Economic Cooperation Airport Capacity Enhancement Project
Project Number 38349-031
Country / Economy Nepal
Project Status Active
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 4005-NEP: South Asia Subregional Economic Cooperation Airport Capacity Enhancement Project
Concessional ordinary capital resources lending US$ 150.00 million
Operational Priorities OP2: Accelerating progress in gender equality
OP6: Strengthening governance and institutional capacity
OP7: Fostering regional cooperation and integration
Sector / Subsector

Transport / Air transport

Gender Some gender elements
Description The proposed project will improve airport capacity at Tribhuvan International Airport (TIA) in Kathmandu and at Gautam Buddha Airport (GBA) in Lumbini by constructing a parallel taxiway extension and domestic apron areas at TIA and a new international terminal building at GBA.
Project Rationale and Linkage to Country/Regional Strategy Civil aviation is crucial to transport, trade, and tourism in the landlocked country, and provides indispensable links for the hilly and mountain areas which are inaccessible by other transport modes. Tourism is one of the major economic activities in Nepal and is on top of the governments priorities. Foreign exchange earned from the tourism sector in FY2018 is estimated at $563 million, which is equivalent to 65% of goods exports. Considering that more than 80% of international tourists come to Nepal by air currently through the TIA, improvement of the civil aviation sector is essential for tourism to flourish and to be channeled toward economic development of the country. The TIA presently serves as the unique gateway airport to Nepal. Even though the TIA plays a critical role in the civil aviation sector of the country as an international gateway as well as a domestic hub, its close proximity to the Kathmandu city center does not allow its expansion beyond the current airport boundary. The increasing demand should be handled through (i) the more efficient use of the available areas within the existing airport premises at the TIA; and (ii) distribution of the concentrated international air traffic to other airports.

Tourism-led economic development in Nepal enhanced

Project Outcome
Description of Outcome

Safety, capacity, and efficiency of air travel to and from Nepal improved

Progress Toward Outcome
Implementation Progress
Description of Project Outputs

TIA airside facilities completed in accordance with the TIA master plan

International terminal building constructed at GBA constructed (Terminal 2)

Next phase of TIA works design completed

Status of Implementation Progress (Outputs, Activities, and Issues) Procurement of TIA parallel taxiway is ongoing.
Geographical Location Nation-wide
Safeguard Categories
Environment B
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects The project is categorized B for environment in accordance with ADB's Safeguard Policy Statement. The project involves the construction of parallel taxiway and hangar aprons in TIA and a new international terminal building in GBA. There are no critical habitats nor cultural heritage sites that will be affected. Low to medium adverse environmental impacts are expected arising from the civil works in the two airports, but the impacts are localized and reversible, and mitigating measures have been proposed. An initial environmental examination was prepared for each site, incorporating an environmental management plan (EMP) to manage adverse impacts identified. The EMP, which adheres to national guidelines of Nepal, World Health Organization guidelines, and ADB guidance documents, identified (i) the mitigating measures for all major environmental impacts in all phases of the project, (ii) the responsible entities to implement and monitor the mitigating measures, and (iii) the cost of implementing proposed measures. The EMP also includes a health and safety plan to minimize the impacts of the coronavirus disease (COVID-19) pandemic.
Involuntary Resettlement The project is categorized C for involuntary resettlement. The TIA and GBA project activities will not involve any involuntary acquisition of land as all work will be undertaken within the existing premises of the airport.
Indigenous Peoples The project is categorized C for indigenous people.
Stakeholder Communication, Participation, and Consultation
During Project Design Salient information regarding the project, including scope, general progress status, beneficiaries, invitations for bid, and consultant recruitment notices, will be provided to the general public. The safeguard documents, i.e., the initial environmental examination including the EMP, resettlement plans, indigenous peoples plan (if any), will be posted on ADB's website. CAAN will provide relevant information in a timely manner, in an accessible place, and in a form and in languages understandable to the displaced people and other stakeholders. If the displaced people are illiterate, other appropriate communication methods will have to be used.
During Project Implementation
Business Opportunities
Consulting Services

An 18-month procurement plan indicating threshold and review procedures, goods, works, and consulting service contract packages and national competitive bidding guidelines. All consultants will be recruited according to ADB's Procurement Regulations (2017, as amended from time to time).

Construction supervision consultant. A firm of international consultants in association with domestic consultants will assist CAAN in implementing the project by (i) providing project management assistance, (ii) carrying out expeditious review of designs, (iii) supervising and administering works contracts, (iv) preparing a project performance management system, and (v) reporting and documenting progress of works. About 90 person-months for international consultant services and 625 person-months for national consultant services will be required. The consulting firm will be engaged using the quality- and cost-based selection method with a standard quality-cost ratio of 90:10.

Individual consultant services. Individual international and national consultants will also be engaged through individual consultant selection for environmental and social safeguard monitoring report preparation; contract management; and project management support. About 6 person-months of international consultant services and 36 person-months of national consultant services will be required.

Next phase design consultant. A second firm of international consultants will be recruited to (i) review the current master plan of TIA, (ii) carry out detailed engineering design and preparation of bidding documents for procurement of works and equipment, and (iii) assist CAAN to undertake public-private partnership in the air transport sector. About 37 person-months of international consultant services and 60 person-months of national consultant services will be required. The consulting firm will be engaged using the quality- and cost-based selection method with a standard quality-cost ratio of 90:10.

Procurement Activities to be concluded in advance include the procurement of two civil works contracts and the recruitment of a construction supervision consulting firm. All procurement of goods and works will be undertaken in accordance with ADB's Procurement Policy (2017, as amended from time to time) and Procurement Regulations for ADB Borrowers (2017, as amended from time to time). All procurement activities will be the responsibility of the project director of the project implementation unit, who will be supported by their staff and consultants. ADB will closely monitor all major project implementation activities. Civil works contracts will comprise three open competitive bidding packages for the (i) extension of the parallel taxiway to connect Runway-02 end at TIA and associated works, (ii) hangar area development at the east side of the runway at TIA and associated works, and (iii) construction of terminal 2 at GBA.
Responsible ADB Officer Yeo, Kai Wei
Responsible ADB Department Sectors Group
Responsible ADB Division Transport Sector Office (SG-TRA)
Executing Agencies
Civil Aviation Authority of Nepal
Ministry of Culture, Tourism and Civil Aviation
Concept Clearance 31 Mar 2020
Fact Finding 24 Jun 2020 to 06 Jul 2020
MRM 03 Sep 2020
Approval 19 Nov 2020
Last Review Mission -
Last PDS Update 01 Dec 2023

Loan 4005-NEP

Approval Signing Date Effectivity Date Closing
Original Revised Actual
19 Nov 2020 22 Dec 2020 10 May 2021 30 Jun 2027 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 198.00 Cumulative Contract Awards
ADB 150.00 09 May 2024 66.31 0.00 44%
Counterpart 48.00 Cumulative Disbursements
Cofinancing 0.00 09 May 2024 18.82 0.00 13%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating Satisfactory Satisfactory Satisfactory Satisfactory - Satisfactory

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.

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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.

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.

  • 25 Mar 2022 | Photo Essay

    Nepal’s Second International Airport Ready for Takeoff

    Despite challenges posed by the coronavirus disease (COVID-19) pandemic, the construction of Nepal’s Gautam Buddha International Airport (GBIA) is nearly complete. GBIA will be Nepal’s second international airport. It will also serve as an alternate for Tribhuvan International Airport in Kathmandu in the event of bad weather or other technical issues there.
  • 20 Nov 2020 | News Release

    ADB Approves $150 Million Loan to Upgrade Major Airports in Nepal

    ADB has approved a $150 million concessional loan to improve the airport capacity of the Tribhuvan International Airport and Gautam Buddha Airport in Nepal.

Contracts Awarded

Contract Title Approval Number Contract Date Contractor | Address Executing Agency Total Contract Amount (US$) Contract Amount Financed by ADB (US$)
Extension of parallel taxiway to connect Runway-02 end at TIA and associated works Loan 4005 25 Nov 2022 Gansu Mechanized Construction Engineering Co. Ltd | No. 125 Heshui Road, Xigu District, Lanzhou City, Gansu Province Ministry of Culture, Tourism and Civil Aviation 45,263,343.95 35,286,366.34
Hangar Area Development at East side of Runway at TIA and Associated Works Loan 4005 06 Jul 2022 AVIC-KDN Airport Engineering Co. Ltd. China. China Civil Engineering Construction Corporation (KDN-CCECC JV) | Airport Economic Core Area Ronghuiyan 31-1, Shunyi District, Beijing, China Ministry of Culture, Tourism and Civil Aviation 35,666,572.81 27,742,710.16
Construction Supervision Consultant for TIA and GBA Loan 4005 04 Feb 2022 EURO CONSULT for Engineering Consultancy | Site, Adak Sk. No:2, 34760 Sar1yer/Istanbul, Turkey Ministry of Culture, Tourism and Civil Aviation 3,582,665.06 3,569,663.55

Procurement Plan

None currently available.