Zurich Airport International opts out of Nepal project

The Nepal government’s plan to force through a mammoth airport project, despite a global recession and concerns about an ecological disaster, has been pushed back after a Swiss company decided to pull out.

The government of Prime Minister K P Oli recently announced it was finalising an agreement with Zurich Airport International (ZAI) to develop the $3.45 billion airport at Nijgad, 75km south of Kathmandu.

However, ZAI says it knows nothing about an agreement.

“In view of the current challenges inflicted on the aviation industry by Covid-19, Zurich Airport International is focusing its activities on our existing projects in India and Brazil,” Raffaela Stelzer, a spokesperson for ZAI told Nepali Times on Thursday. “We do not foresee any investments in projects outside these areas until the situation has significantly improved.”

The Oli government had been pushing Nijgad as a ‘national pride project’ ever since it came to power in 2018, and it was aggressively backed by former Tourism Minister Rabindra Adhikari, and by his current successor Yogesh Bhattarai.

The government argues that Kathmandu airport is too congested, has limited room for expansion, and Nijgad would be a game changer for Nepal’s economy. But it is not clear if the Nepal government is aware of the ZAI decision.

In May, Minister Bhattarai authorised felling of more than 4,000 trees for a link road to the project site located in the last remaining native hardwood forest in Nepal’s eastern plains. The decision came in defiance of the standing Supreme Court order to not engage in any tree cutting for the airport project.

Last week, Bhattarai chaired a meeting which was told that nearly 60,000 trees had been counted and labeled for further felling. He instructed officials to complete the tree inventory by mid-November, and plan the relocation of settlements in the zone. Reports from the field say the land mafia is already moving in and encroaching on forests in anticipation of the project.

In Last week’s meeting, Bhattarai also directed the Investment Board Nepal (IBN) to communicate the plans to ZAI, and prepare to sign an agreement with the Nepal government.

However, even in May it was apparent that there had been no formal understanding between the Nepal government and ZAI, even though in Kathmandu the Ministry of Civil Aviation and Tourism was using an agreement with ZAI as the basis for its decisions to go ahead with allocating a budget for tenders, and planning to cut trees.

This has reinforced speculation that a purported deal with ZAI is just being used by the government to channel money for a project that it knows will not happen so the budget can be siphoned off -- as has commonly happened in many other infrastructure projects. Critics have argued that Nijgad is not really an airport project, but a logging concession. 

ZAI’s Stelzer told us in May: “Yes, in 2019 we expressed our general interest in this project to the government. Since then the ball has been in the court of the Nepalese government. So, the project has never really started for us and we are not able to say more about it at the moment.”

Yet, Minister Bhattarai and the government have spent the last four months pretending to media and the public that things were in order with their chosen Swiss partner. Now, ZAI has confirmed that it is no longer interested in building the airport.

The arguments against building Nijgad are both economic and environmental. When the grandiose project was first mooted in 1994, passenger jets had shorter range, and the hub-and-spoke model still made sense in aviation. Flights from Europe to East Asia and Australia had to make stopovers, and Nijgad could have been Nepal’s Singapore or Dubai, boosting tourism.

However, with new Boeing 777X and 787-10s as well as Airbus 350s, planes can now fly point-to-point for 17 hours or more at a stretch, obviating the need for a refuelling stop. Also, awareness about climate change was already reducing air travel, and now the Covid-19 crisis has forced global aviation to go belly-up. Experts agree it is the wrong time to be building mega airports.

Situated in the plains just south of the Chure Range and next to Parsa National Park, Nijgad is the last remaining patch of the famous Char Kose Jhari wilderness that spanned the Tarai. The forests have an important role in the hydrological ecosystem and food security downstream. Clear-cutting would jeopardise the region’s rich biodiversity, and wildlife corridors for wild elephants and other animals.

A pro-forma government Environment Impact Assessment (EIA) that cleared the project was found to have copy-pasted entire paragraphs from a hydropower scheme in the mountains. The Nijgad EIA says the project site at 200m elevation is the habitat of two mammal species only found in the high mountains.

The government has said it will build Nijgad with its own money if foreign investors are not interested. But can Nepal, which has been hard-hit by the Covid-19 crisis,  afford an expensive airport when job losses are driving Nepalis to hunger and suicide?

Yet, the government remains firmly committed to this white elephant project. The reason probably has something to do with profits that can be made in kickbacks for logging contracts. It must be too tempting to pass up – especially to build a political war-chest ahead of the 2022 elections.

The deal to clear-cut the valuable sal hardwood timber is said to be worth at least $500,000,000, and if there is no airport, there will be no justification to clear the forest.

Illegal natural resource extraction is already the most lucrative business in Nepal, with contractors enjoying full political protection from many local ward chairs to the federal government in Kathmandu. Illegal sand-mining, quarrying, and the land mafia are well-established and have deep connections to politicians at the highest levels in Nepal.

In the 2017 elections, some of these contractors even got themselves elected as mayors, and became members of provincial and federal parliaments. Illegal and unsustainable sand and boulder mining of mountains and rivers have changed the entire landscape of parts of Nepal.

The government and backers of the project have called those opposing the project  ‘anti-development’ and ‘dollar-funded’, and people who do not want to see Nepal prosper.

Bara district, where Nijgad is located, is also ground-zero for extreme weather events in recent years: heat waves, recurring floods, winter cold snaps that have killed hundreds, and even a freak tornado last year that flattened villages, killing 70.

With the climate crisis intensifying natural disasters, would any developer investing $3.45 billion take such a site seriously for an airport that needs to be a busy international aviation hub?

The answer is no. But there is just too much money to be made, and Nepal’s kleptocracy is pushing this ghost airport so it can make a quick killing.

Kashish Das Shrestha is a National Geographic Explorer. He is a former adviser to Parliament’s Natural Resources and Means Committee and Water and Energy Committee.

@kashishds