Second International Airport project gets moving again

The Second International Airport (SIA) project has stirred back to life after 21 months in hibernation. The futuristic jet hub, which is planned to be built in Nijgadh, Bara in the Tarai plains, has regained government attention, and it has planned to open global bidding for the project.

In April last year, Korea’s Landmark Worldwide Company (LMW) had submitted a detailed feasibility study (DFS) to the Tourism Ministry. Since then, the airport plan had languished on the back burner. Presently, the Investment Board (IB) has been holding talks with the ministry. And there are plans are to call bids within the next three-six months.

The report was sent to the BOOT committee of the National Planning Commission for necessary study immediately after its DFS. At that time, the Tourism Ministry had recommended two options for awarding the contract for the project.
The first one was request for proposal (RFP) which is based on the selection process, and the second is based on the BOOT Act Section 9 which says that a project can be awarded directly to any interested investor. The BOOT Act says that the Rs 2-billion project can be awarded directly to any investor without calling for RFPs.

The second option was recommended with the aim of assisting LMW which had been showing an interest in constructing the project since 2007. The Tourism Ministry had also pledged to give due priority to the company before it was selected for DFS. Officials said that LMW can also participate in the global bidding.

According to IB sources, two Indian companies—GMR Infrastructure and Infrastructure Leasing & Financial Services Limited (IL&FS)—have shown interest to develop the project. Other companies from Germany, France and Singapore have also shown interest in the SIA. “There has been a large number of international developers eying the project,” said a senior official at the IB.
A group of international experts will be hired to review the DFS submitted by the LMW, said the IB sources. “Once the review is completed, the board will finalize the date to call global bids.”
Tourism secretary Yajna Prasad Gautam said that like proposed earlier, the SIA would be developed under the Built Operate Own and Transfer (BOOT) model. LMW has invested US$ 3.55 million to prepare the DFS, and the company will get its money back if it fails to win the global bid, said sources at the IB.

“The company that wins the bid has to pay the cost of the DFS,” the source added. On March 8, 2010, the government had awarded the contract for carrying out the DFS to LMW.
The estimated cost for the first phase of the project, according to the report, would be US$ 650 million. The SIA will cover 3,000 hectares of land (2,000 hectares for the airport and the rest for an airport city). LMW’s study said the proposed airport could handle 15 million passengers until 2030 and even accommodate the super jumbo Airbus A380 after the first phase of construction.

The proposed airport apron has 15 stands for international carriers, four stands for domestic and two for cargo flights. The first passenger terminal has an area of 75,500 sq m, six boarding gates, 34 check-in counters, six security inspection counters, 35 immigration counters, eight customs inspection counters and six baggage claim counters. By the end of the third phase of construction, the airport will have a parallel runway, enabling it to handle 60 million passengers annually.

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