First Business News Portal in English from Nepal
KATHMANDU: The Civil Aviation Authority of Nepal (CAAN) decided to transition towards the Public-Private Partnership (PPP) model for the operation and management of international airports.
The decision was made during a meeting of the CAAN Management Committee, approved by the Ministry of Culture, Tourism, and Civil Aviation, and conveyed through a comprehensive package.
The meeting, presided over by Culture, Tourism, and Civil Aviation Minister Sudhan Kirati, entrusted the responsibility of constructing and operating new international airports in Pokhara, Gautam Buddha (Lumbini), and the proposed Nijgadh International Airport under a unified package.
The private sector’s advanced capabilities in providing competitive and high-quality services in airport management prompted this shift. Despite the construction of international airports in Pokhara and Bhairahawa, operational challenges emerged, leading both the Ministry and the National Planning Commission to advocate for collaboration with the private sector.
The longstanding issues with management effectiveness and customer complaints at Tribhuvan International Airport in Kathmandu, coupled with stagnant revenue, had previously sparked suggestions for private management.
Earlier studies, conducted in collaboration with the government and international organizations, recommended bringing airport management under private collaboration rather than government control.
However, concerns about potential criticism led the government to step back. Now, with the decreased international flights in Pokhara and Bhairahawa airports, the authority has opted to involve the private sector for enhanced management.
Stakeholders revealed that the decision to allow private management aligns with a broader initiative to improve airport management. The authority intends to establish a collaboration with the private sector, forming a company that will bring in foreign management.
Er. Pradip Adhikari, Director General of the CAAN stated that the government aims to boost efficiency by providing opportunities directly to a domestic company, rather than a foreign one.
Additionally, the CAAN is gearing up to introduce the PPP model for airport management, citing its successful global implementation. The model implemented by GMR in India serves as a notable reference.
CAAN’s recent decision to consolidate the construction and operation of Gautam Buddha International Airport in Lumbini and Pokhara International Airport into a single package is viewed positively.
However, concerns linger about guaranteeing routes and markets to attract an Indian company, prompting some officials to question the benefits of private management without these assurances.
The authority has intensified efforts to attract private investment for managing Tribhuvan International Airport in Kathmandu and Nijgadh International Airport.
Although the decision has been made at the policy level, finer details regarding security in the agreement with the private sector are yet to be finalized. Government officials mentioned that the matter will be decided after thorough discussions.
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