Nepal | May 30, 2020

ADB blacklists principal Chinese contractor

• GAUTAM BUDDHA REGIONAL INTERNATIONAL AIRPORT PROJECT

Rajan Pokhrel
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KATHMANDU, August 6

Nearly seven months after Prime Minister Sushil Koirala laid foundation stone of the much-hyped Gautam Buddha Regional International Airport project in Bhairahawa, the Asian Development Bank has blacklisted its principal contractor on charges of submitting false claims to bag the prestigious project worth billions of rupees.

The sources have revealed that the ADB blacklisted China’s Northwest Civil Aviation Airport Construction Group, which was awarded contract worth billions by the Civil Aviation Authority of Nepal for the extension of GBA in October. The project is aimed at turning the airport into an alternative to Tribhuvan International Airport.

The revelation also comes at a time when the country is struggling hard to revive its economy that has been crippled by the after-effects of the devastating April earthquake and its aftershocks.

According to sources, ADB’s preliminary investigation has discovered that the Chinese firm produced a number of fake documents that it reportedly obtained from Sudan, the conflict-hit African nation, to meet the qualifications for an International Competitive Bidding in accordance with ADB guidelines regarding the project expertise.

“ADB has informed Civil Aviation Authority of Nepal that it temporarily blacklisted China’s NCAACG on suspicion of submitting false claims by producing fake documents from Sudan,” CAAN’s Deputy Director General Devanand Upadhyay told THT.

The ADB also notified the Ministry of Culture, Tourism and Civil Aviation that it wouldn’t allow NCAACG to bid for ADB-financed fresh contracts, as it suspected foul play by the Chinese firm to win a contract of GBA Upgrading Component under the South

Asia Tourism Infrastructure Development Project funded by the bank itself.

Confirming the ADB’s move, Joint Secretary Mohan Krishna Sapkota, who heads the Planning and Evaluation Development Division in the ministry, said, “The ministry has already instructed CAAN to initiate necessary action on the matter.”

CAAN’s DDG, however, claimed that the ADB wanted the Chinese firm to continue the construction in Bhairahawa. “The ADB’s letter states that its move to blacklist NCAACG won’t affect the ongoing construction work at GBA,” Upadhyay told this daily. But a senior executive of CAAN wondered how a blacklisted firm could be allowed to continue work.

Murari Bhandari, project director of GBA Extension Project, told this daily that it was a matter of investigation by the ADB, as the final contract documents were also verified as well as accepted by the ADB headquarters while awarding CAAN’s Rs 6.30 billion project. “As per the ADB’s letter, NCAACG can continue its work,” he said.

According to CAAN, the then director general of CAAN, Ratish Chandra Lal Suman, and general manager of Northwest’s overseas Department Zhou Zun signed the Rs 6.22 bn deal in October. As per the deal, the renovated airport will become operational by the end of 2017.

During the final review of the financial documents by the ADB and CAAN, the Chinese firm had quoted a price tag of Rs 5.50 billion, which is Rs 897.35 million less than the price quoted by the second lowest bidder. China Harbour Engineering Company and a Nepali-Spanish joint venture Sanjose-Kalika Construction were the second and third lowest bidders, quoting Rs 6.40 bn and Rs 6.68 bn, respectively.

The upgraded airport will have a 3,000-metre runway and will be capable of serving 760,000 passengers every year after the completion of the first phase by 2018. The Chinese firm will reconstruct exits and parallel taxiways with flexible pavements, build a new international aircraft parking apron with rigid pavements and convert one runway into a parallel taxiway.

The project has been financed by a loan and grant aid of $42.96 million and $12.75 million, respectively, from the ADB.

Suman Shrestha, a retired director of CAAN, was appointed a board member of the aviation regulatory body two months ago to lobby in favour of NCAACG, claimed a source. He said Shrestha, being a deputy director in the past, had also played a key role in awarding contract to the Chinese firm.

• THT EXCLUSIVE

Charges

• The Asian Development Bank has blacklisted China’s Northwest Civil Aviation Airport Construction Group on charges of submitting false claims to bag the prestigious project worth billions of rupees
• The Chinese firm produced a number of fake documents that it reportedly obtained from Sudan to meet the qualifications for an International Competitive Bidding in accordance with ADB guidelines regarding the project expertise
• ADB suspects foul play by the Chinese firm to win a contract of GBA Upgrading Component under the South Asia Tourism Infrastructure Development Project funded by the bank itself


A version of this article appears in print on August 07, 2015 of The Himalayan Times.


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