Nepal | June 26, 2019

GBIA generates mixed emotions from locals, investors

Sujan Dhungana

Bhairahawa, June 10

When plans to upgrade Gautam Buddha International Airport in Bhairahawa were first announced, it had led to high expectations among stakeholders in the project area and the tourism fraternity of the country. However, of late, those who have invested in hospitality businesses close to the airport have started getting frustrated due to the repeated delays in completing the project.


There is no doubt that GBIA has made remarkable progress in recent months, as almost 80 per cent of works has been completed so far. Till June last year, only 43 per cent of works had been completed.

Prabesh Adhikari, project manager of GBIA, is hopeful that construction of physical infrastructure within GBIA will be completed by December if everything progresses as planned and commercial operation of the country’s second international airport will begin from March next year. If this happens, Adhikari will be credited for not only successfully completing GBIA, but also for bringing into operation first national pride project.

Locals are hopeful that once completed, GBIA will change the outlook of not only Bhairahawa but the entire Lumbini region.

However, the frustration among those who have invested in construction of big hotels around GBIA and Lumbini is rising due to frequent delays in project completion.


As per the investors, the delay has added a huge financial burden on investors and further delays could lead many of them to bankruptcy.

The construction of GBIA started in January 2015 with a target to complete it within December 2017. However, only 27 per cent of physical works had been completed by then.

Hence, Civil Aviation Authority of Nepal — the aviation sector regulator — had extended the project’s construction deadline to June 15, 2018. But till then only 46 per cent of physical works had been finished and CAAN further extended the deadline to June 16 this year.

Investors are worried that even the third deadline was missed as 20 per cent of physical works is still to be completed and CAAN is preparing to extend the project deadline for the third time, possibly to December.

“There are many investors like me who have injected billions in star hotels and while some of these facilities are ready to serve tourists, majority of them are nearing completion.

However, the occupancy rate has been dismal and hoteliers are under immense financial burden,” said Pawan Halway, managing director of Pawan Group of Hotels.

Along with the delayed operation of GBIA, banks’ interest rates have been perennially rising and this has troubled the investors. They mentioned that initially the banks provided loans at eight per cent interest which has ballooned to over 12 per cent at present.

“If the situation does not improve and operation of GBIA is delayed by another year then a majority of hoteliers here will be bankrupt,” said Sanjay Bajimaya, first vice-president of Nepal Association of Tours and Travel Agents.

Project Manager Adhikari accepts that delayed operation of the airport has troubled investors and their concerns are genuine. However, he believes that construction of any large project is not an overnight process and investors should have formulated a proper business plan to cope with such situations.

“Though project works were affected initially, things have progressed smoothly in recent days,” informed Adhikari. “Effective coordination among related government agencies and timely decisions on various aspects related to the project will ensure that at least all physical infrastructure of GBIA will be completed within this December and the airport will start operation from March next year.”


As of today, all works related to construction of 3,000-metre runway pavement, pavement of linking taxiway, structural work of arrival and departure lounges, administrative building, pavement of international apron area, structural work of control tower building (except last floor) and pavement of CFR apron, among others have been completed.

As per Adhikari, remaining works include installation of different aviation related equipment and technology and finishing works of terminal buildings, among others.

Chinese contractor Northwest Civil Aviation Airport Construction Company has been developing the $70 million project. Of the total project cost, Asian Development Bank (ADB) has been offering 40.5 per cent as loan and 10 per cent as grant. Similarly, OPEC Fund for International Development is assisting 30.5 per cent of the project cost while CAAN is injecting 11 per cent.

Meanwhile, ADB Country Director Mukhtor Khamudkhanov expressed his happiness with the project in the recent months and expects that completion of GBIA would boost tourism and entire economy in the region.

A version of this article appears in print on June 11, 2019 of The Himalayan Times.

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