Kathmandu: Experts have revealed delays in operating Nepal’s airports under the Public-Private-Partnership (PPP) model. They suggest that airports should focus on profitability, besides security and sensitive areas, while also recommending privatization and management responsibilities to the private sector.
The government has formed a committee to study the operation of Tribhuvan International Airport, as well as airports in Pokhara, Bhairahawa, and the proposed new international airport, under the PPP model.
The committee, in its discussions with experts held in the capital, emphasized the necessity for long-term profitability of Nepal’s airports and stressed the compulsory involvement of the private sector if they are to be operated profitably.
Former Director-General of the Civil Aviation Authority of Nepal, Tri Ratna Manandhar, dismissed the option of major investments in airports like Nijgadh under the PPP model. He cited India, where most airports are privately funded, as an example.
With Kathmandu Airport reaching capacity, and Bhairahawa and Pokhara not yet achieving full international status, the lack of options like Nijgadh has led to a push for private sector involvement, according to Manandhar.
Member of the study committee and PPP expert, Ghanshyam Ojha, highlighted the absence of a clear privatization and deregulation process under the PPP model. He expressed concerns that without proper regulation by the government, quality work might be compromised.
“The private sector seeks to maximize profits at minimal costs,” he said. “If there’s no clear regulation, the quality of work might suffer.”
He further added that while Nepal currently lacks expertise in privatization, it has successfully utilized the PPP model in hydropower projects. He cited India’s successful implementation of the model in road and airport construction and management.
Former Director-General of the Civil Aviation Authority, Hari Bhakta Shrestha, suggested that smaller airports should focus on providing services that aren’t profitable for the private sector. He cited Zurich Airport’s success in generating revenue beyond flight operations.
Shrestha noted that airports incur significant costs in operation and maintenance, which can only be offset if passengers are willing to pay higher ticket prices. Lowering ticket prices could affect other revenue streams, making economic viability difficult, he explained.
The committee, chaired by former Director-General Pradeep Adhikari, recommended studying the viability of major infrastructure projects under the PPP model. Given the lack of support from all government bodies, the committee suggested that the government conduct a comprehensive study to determine the feasibility of the PPP model.