Kathmandu, April 13

Failure to meet deadline to complete a multi-million dollar project funded by the Asian Development Bank has hit the baggage handling system at the country’s sole international airport.

The installation of new system of baggage carriage at the arrival terminal of the Tribhuvan International Airport as part of the three-year-long project worth more than $80 million, which exceeds the estimated cost for the construction of second international airport (Phase I) in Nijgadh, was halted on Friday, according to a highly-placed source at TIA.

Even after missing the deadline, the contractor, Constructora San Jose, qualified by ADB under the Air Transport Capacity Enhancement Project, refused to continue the installation of new conveyor belts, violating a component of the project worth over $4.2 million, an official said.

“The contractor halted the belt installation work on Friday, seeking an early payment of more than Rs 17.9 million for its ‘intensive’ contribution during the removal of a crash-landed Turkish Airlines’ jet from the runway last year,” he added.

Though the Civil Aviation Authority of Nepal officially transferred its payment call to the Turkish Airlines, San Jose, however, had neither signed any contract with the airlines nor was it requested by TIA/CAAN to remove the ill-fated jet, a source said, adding that Indian Air Force's Hercules had voluntarily delivered techies to remove the stuck plane.

“San Jose, which missed its deadline to complete the project, has irrelevantly raised the issue of payment of millions of rupees, as it was not the part of the project component,” a senior director said. “The contractor was assigned to install two conveyor belts but it stopped the installation work raising an irrelevant demand.”

According to TIA, there are only two conveyor belts in operation at the arrival terminal after the same contractor dismantled a belt six months ago.

TIA Improvement Project Directorate said it had repeatedly warned the Spanish firm, which delayed its work for long citing unavailability of construction materials due to the devastating earthquake and the border blockade but paid no heed to the directorate's concerns.

CAAN officials admitted that the regulatory service providing body couldn’t terminate the contract with San Jose in haste, as the firm certainly opts for arbitration. “There are a number of visible loopholes on part of CAAN, as it failed to monitor project activities since the beginning,” a senior CAAN executive told this daily.

According to the latest report, the controversial project made a progress of less than 20 per cent though it was expected to upgrade TIA’s capacity to handle more than 5.85 million passengers annually with the completion of project components, such as enlargement of the runway, construction of new taxiways, extension of the apron, new lighting in the airfield, expansion of the international terminal, installation of new baggage handling system and other civil works and associated facilities, by March 2016.

Out of ADB’s total assistance in International Competitive Bidding-01, $70 million was provided as loan and $10 million as grant.

When contacted, San Jose’s officials, including its site manager Óscar Gutiérrez, refused to comment.

According to a senior director at CAAN, the overall progress of all components of ATCEP worth $150 million is just 30 per cent while the investment at TIA was made without doing cost benefit analysis to squander away foreign grant and loan.