The cabinet meeting on Monday endorsed the agreement between the Civil Aviation Authority of Nepal and CAMC Engineering Co (CAMCE) of China, paving way for the construction of an international airport in Chinnedanda of Kaski.
According to officials, the finance ministry can formally start the process to secure soft loan from China EXIM Bank for the project. The bank has agreed in principle to provide loan to the government to build the new airport in Chinnedanda of Kaski, three kilometers east of the existing domestic airport.
The project, which was initiated nearly four decades ago, has been idle since July 2012 after CAMCE quoted $305 million for construction works, 85 percent higher than the government estimate. The government had expected the project cost at around $166 million.
CAAN Director General Ratish Chandra Lal Suman and Luo Yan, chairman and president of CAMCE, had signed the agreement to construct the airport on May 22.
As per the agreement, CAMCE will construct the runway, taxi-way, apron, international and domestic terminal buildings, air-traffic control tower, cargo terminal building and a hangar. The airport, which will spread over 200 hectares, has a 2,500 meters long and 45 meters wide runway.
Earlier, the board meeting of CAAN chaired by the then tourism minister Bhim Prasad Acharya had approved the project with the revised cost of $215.96 million on April 7.
The government had acquired 3,106 ropanis of land at Chinnedanda for the airport 38 years ago. It is planning to acquire another 500 ropanis this year. It has allocated Rs 2.6 billion for land acquisition and fencing purpose in the budget for 2014/15.
CAMCE is expected to complete construction of the airport within four years. CAAN officials say the airport will come into operation from 2019.