Nepal’s challenging terrain makes air transport an important part of the country’s overall transport system. Air transport provides access to many remote mountainous areas and is vital to achieving the government’s tourism targets and resulting economic benefits. But at project appraisal, safety concerns needed to be urgently addressed in relation to Tribhuvan International Airport (TIA), Nepal’s only international airport. TIA’s airside facilities; runways; taxiways; apron; and communication, navigation, and surveillance equipment had not been fully compliant with international safety standards and recommended practices. The domestic airports in Lukla, Rara, and Simikot, which serve remote areas inaccessible by road and support tourism development, also needed urgent rehabilitation and facilities and equipment upgrading. Urgent actions were also needed on the shortage of qualified and trained staff and lack of information, communication, and institutional management systems in the Civil Aviation Authority of Nepal’s (CAAN).
To help address the situation, the Asian Development Bank (ADB) approved a loan of $70 million and a grant of $10 million in November 2009 for the Air Transport Capacity Enhancement Project. The project’s envisaged impact was improved transport connectivity promoting broad-based economic growth. Its expected outcomes were (i) improved safety and capacity at TIA and the domestic airports in Lukla, Rara, and Simikot; and (ii) improved institutional capacity of CAAN, an autonomous organization responsible for the administration and operation of civil aviation in Nepal.
The project consisted of investment and capacity building components, including (i) enhancing the safety and capacity of TIA in Kathmandu by reconfiguring and upgrading its airfield side infrastructure to international safety standards; (ii) enhancing the safety of three remote domestic airports with additional safety infrastructure; and (iii) improving CAAN’s institutional overall sector management capacity by updating existing regulations, developing a strategy to adapt the regulatory framework to international standards, upgrading internal policies, and identifying viable business opportunities for future airport infrastructure development and maintenance.
Only three of 10 output targets in relation to TIA were achieved within the project period. Completed works included 3,000 square meters of domestic terminal construction, installation of an 800-kilovolt ampere (kVA) generator and uninterrupted power supply system, and procurement and installation of air traffic control communication equipment at TIA. Due to implementation delays, most of the civil works were still ongoing at the time of ADB’s completion review mission in February 2020. Ongoing works are funded by the government. Apart from strong ownership and commitment, this also shows that the outputs are critical and priority investments for the government. However, some of the sub-outputs under the TIA component were dropped due to technical feasibility issues.
Safety improvement of the three remote domestic airports, comprising 3 infrastructure upgrading output targets, was partially achieved. The following were provided: a visual alignment guidance system at Lukla Airport plus snowplowing and fire extinguishing equipment at Rara and Simikot airports. Due to procurement delays, runway paving at Rara Airport was carried out using CAAN’s own funding. Meanwhile, some unfinished equipment subcomponents at the Rara and Simikot airports were cancelled with the termination of this project’s main civil works contract.
Completed outputs to enhance CAAN’s organizational and management capacities include (i) a draft Civil Aviation Act based on International Civil Aviation Organization standards, (ii) a civil aviation development strategy together with a legal framework and implementation plan, (iii) a study on airport transport development and corporate business plan, (iv) a study on human resources, (v) a concept plan and technical specification to improve CAAN’s information and financial management systems, and (vi) a due diligence study for private sector participation. The draft strategy, studies, and plans have provided bases and references for the new national civil aviation bills prepared by a task force under the Ministry of Culture, Tourism and Civil Aviation. The bills were submitted to Parliament in February 2020 and are expected to be approved within the year.
The completed outputs under this project are expected to complement Nepal’s other investments in civil aviation such as an upcoming ADB policy-based loan and technical assistance grant for sector reforms and the continued restructuring of CAAN. Despite the outbreak of the coronavirus disease (COVID-19) in 2020, the importance of tourism to the country will continue, and interventions to develop airports and strengthen CAAN will remain highly relevant for economic development.
The project had CAAN as executing agency. A project coordination unit was established within CAAN to take charge of project management. Two project implementation units (PIUs) were planned at appraisal, with one responsible for implementing the investment component and the other the capacity development component. During implementation, only one PIU was established, for reasons of efficiency. The PIU comprised the former TIA Improvement Project Directorate.
