Ineco PDF

Capacity Development of
Civil Aviation Authority of Nepal

INCEPTION REPORT (DRAFT)
APRIL 2012

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Capacity development of the Civil Aviation of Nepal Page 3 of 65
Inception Report - DRAFT
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Contents
1 EXECUTIVE SUMMARY ............................................................................................................................ 6
2 BACKGROUND OF THE PROJECT ........................................................................................................... 8
3 TIMELINE OF DOCUMENTATION ............................................................................................................. 9
4 ANALYSIS OF CURRENT SITUATION ...................................................................................................... 11
4.1 LEGAL ..................................................................................................................................................... 11
4.2 PLANNING............................................................................................................................................... 14
4.2.1 National Plan For Civil Aviation Development..................................................................... 14
4.2.2 Corporate Business Planning.................................................................................................. 21
4.2.3 Private Sector ........................................................................................................................... 21
4.2.4 Non-Aeronautical Revenues.................................................................................................. 22
4.3 RESTRUCTURING ....................................................................................................................................... 22
4.4 HUMAN RESOURCES TRAINING PROGRAM ................................................................................................. 23
4.5 COMPUTERIZATION................................................................................................................................... 24
4.6 MIS ........................................................................................................................................................ 24
5 METHODOLOGY OF WORK .................................................................................................................. 25
5.1 LEGAL ..................................................................................................................................................... 25
5.2 PLANNING............................................................................................................................................... 29
5.2.1 National Plan For Civil Aviation Development..................................................................... 29
5.2.2 Corporate Business Planning.................................................................................................. 48
5.2.3 Private Sector ........................................................................................................................... 50
5.2.4 Non-Aeronautical Revenues.................................................................................................. 52
5.3 RESTRUCTURING ....................................................................................................................................... 54
5.4 HUMAN RESOURCES TRAINING PLAN ......................................................................................................... 58
5.5 COMPUTERIZATION................................................................................................................................... 60
5.6 MANAGEMENT INFORMATION SYSTEM ............................................................................................ 62
5.6.1 MIS ............................................................................................................................................. 62
5.6.2 Financial Management System ............................................................................................. 64
6 PROPOSED WORK SCHEDULE ............................................................................................................... 65
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1 EXECUTIVE SUMMARY
Ineco in joint venture with Prointec and ERMC was appointed by the Civil Aviation
authority of Nepal (CAAN) to develop the Capacity Development Plan for the CAAN.
Technical proposals submitted on 7th February 2011, needed to modify the proposal in
order to incorporate the latest development in Nepal in the area of Civil Aviationl.
The mandate of the contract signed in January 2012 required developing an inception
report of this project within 30 days from the contract start up. The start up of the project
was on 6th March 2012.
The main task in this project consists on the capacity development and implementation of
the public organizations involved in the civil aviation in the country, regulator and
operators.
The different components of this project are:
Components
1. 2. 3. 4. 5. 6. Management

Legal Planning Restructuring HR Development Computerization Information System
2A. 2B. 2C. Private 2D. Enhancing 6B. Financial

National Corporate Sector Non‐Aeronautical 6A. MIS Management
Plan Business Participation Revenue System
In developing the Capacity Development of CAAN the Terms of Reference highlighted

some objectives to be taken into consideration. These are:
• To review the entire set of laws, rules and regulations applying to the aviation
sector. Nepalese legislation is to be benchmarked across the requirements deriving
from ICAO’s Annexes and documents in order to draw attention to elements that
could be missing or are not adequately addressed.
• In order to the new air traffic forecast, to develop the National Plan for the Civil
Aviation development. This document will be a 20 years plan including:
o The National Air Transport Plan

o The National Airports Plan
o The National Airside Plan
• To develop the Business Plan of the new organizations
• To enhance and expand the participation of the private sector, especially in

airport facilities/support services.
• To enhance the non-aeronautical revenues at the airports.

____________________________________________________________________________________________________
• To restructure CAAN into the new Organizations (regulator and operator/s) and
develop a transition plan in order to implement the new organizations.
• To define and implement a Staff Training Program, useful, not only for the transition
period, but also for the future.
• To establish the systems & network requirements arising as a result of the

restructuring of the organizations.
• To develop and implement a Management Information System (MIS) into the new
organizations, including the financial management system.
Prior to this assignment, the ICAO Safety Audit (USOAP) done in 2009, has defined clearly
the principal working areas of this project. The information provided and conclusions
outlined in the Report are going to be the base for the first tasks of this project.
The regulatory framework will be analysed and amended or changed in order to be

compliant with the new international regulatory framework and ICAO regulations and
recommendations.
The air transport system is something in a continuous development and the gathering
information process has been defined in order to clarify the starting point in all different
areas of the project. CAAN must continue working in defining the future of air transport in
Nepal.
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2 BACKGROUND OF THE PROJECT
1. Involvement of Asian Development Bank. On May 25th 2010 The Government of

Nepal signed an agreement has received financing from the Asian Development
Bank (ADB) (Loan N° 2581 and Grant 0181-NEP ) to implement the Air Transport
Capacity Enhancement Project.
AADB's past involvement in the subsector in Nepal focused mainly on the phased
development of Tribhuvan International Airport (TIA), which included lengthening
of main runway and taxiways, construction of an international terminal building,
and expansion of the domestic terminal building. These improvements helped to
alleviate congestion, sustain traffic growth, and promote tourism, playing a
significant role in supporting the country's economic and social development.
ADB's overall strategy in the subsector is to improve domestic and international
connectivity in order to support the country's development goal of promoting
broad-based economic growth.
The Project is in line with continuing ADB assistance with strategic objectives as set
out in the country strategy and program
• continue assistance in the improvement of TIA and strategic domestic airports,

• continue to support the restructuring and reform of CAAN, and
• Assist the Government with improving the regulatory framework for private
sector participation in the subsector.
2. the Consultant´s involvement: the Consultant signed an agreement with the Civil
Aviation Authority of Nepal on January 17th, 2012 to perform the Capacity Building
Services established in the Terms Of Reference RFP# ATCEP – Consultant 2/2009-10.
mobilized its consultant team on 6th March 2012.
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3 TIMELINE OF DOCUMENTATION
Reports Description/Technical Accomplishments Timeframe

Inception Report Initial findings and, if appropriate, updated Month 1 from start of
approach, methodology and work plan the project
Monthly Progress Brief details of the work carried out during the Monthly (by the 10th
Reports previous month (all components), the day of each month
problems encountered or anticipated, following the
together with the steps inception report)
Component 1. Legal Interim Deliverables:
Completion Report 1. Report on the review of the Civil Aviation
Act and the CAAN Act (Draft 3 weeks after
inception report)
2. Report on privatization options and
implications for the legislative review (Draft 5
weeks after inception report)
3. Draft new legislation (First draft June 10th
2012)
4. Detailed regulatory review (Regulations,
CARs and guidance materials) (September
10th 2012)
5. Review the proposals for restructuring
CAAN as a regulator of civil aviation, and for
creating a new state authority to operate the
national airports and the air traffic and
navigation system (mid October 2012)
6. Draft legislation to establish new state
authority to operate the national airports and
air traffic and air navigation system
(November 30th 2012)
Component 2A. Interim deliverables:
National Plan 1. Inception (July 10th 2012)
Completion Report 2. Working Paper Air Transport (September
10th 2012)
3. Working Paper Airports (November 10th
2012)
4. Working Paper Airspace (November 10th
2012)
5. Draft Report National Plan (January 15th
2013)
6. Final Report National Plan (March 6th 2013)
7. Documents about Second International
Airport (non scheduled)
Component 2B. Interim deliverables:
Corporate Business 1.Draft Business Plan CAAN (June 10th 2013)
Planning 2. Draft Business Plan Operators (June 10th
Completion Report 2013)
3. Final Business Plans (September 2013)
Component 2C. Interim deliverables:
Private Sector 1.Working Paper Private Sector Opportunities
Participation (September 10th 2012)
Planning. 2.Finantial Analysis (September 10th 2012)
Completion Report
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Component 2D. Interim deliverables:
Enhancing Non- 1.Review of CAAN´s current non-aeronautical
Aeronautical revenue generating activities and
Revenues identification of additional commercial
opportunities (November 10th 2012)
Component 3. Interim deliverables:
Restructuring Plan. 1.Inception Report-Restructuring (May 10th
Draft Implementation Plan (September 15th
2012)
Draft Transition Plan (December 15th 2012)
Human Resources 1.Staff Training Programmes (June 30th 2012)
development 2. Courses Development (non-scheduled)
Completion Report
Computerization 1.Computerization Concept Plan (June 30th
2.Technical Specifications (November 15th
2012)
3. User Manuals (March 6th 2013)
Component 6: MIS & Interim Deliverables:
Finantial 1.Inception for MIS (July 15th 2012)
Management 2. MIS Concept Plan (October 15th 2012)
System Completion 3. Functional Specifications (February 2013)
Report 4. Detailed Technical Specifications (May
2013)
5. User Manuals. (November 2013)
6. Accounting System Review (June 30th 2012)
7. Accounting System Procurement
Specification (September 15th 2012)
Project Completion In accordance with ADB´s format. Upon Final
Report Project Completion (June 2015)
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4 ANALYSIS OF CURRENT SITUATION
The analysis of current situation in Air Transport in Nepal included in this document is a
general review as provided by the Nepal experts and counterpart staff involved in this
project.
Following a series of meetings held between the consultants and the Nepal experts and
counterpart staff from CAAN and MOTCA, and in order to define the starting point for this
project, there are some issues that will modify the schedule proposed on February 2011.
4.1 Legal
The legal framework for civil aviation in Nepal is currently contained in the most part in 2
main Acts and a series of regulations and rules covering most of the functional aspects.
A complete list of civil aviation legislation and guidance materials as compiled by the
consultant includes the following documents (indicating whether they were available or
not to the consultant at the time of preparing this report:
Available documents
1. Civil Aviation Act, 2015 (updated up to 2066)

2. Civil Aviation Authority of Nepal Act, 2053
3. Civil Aviation Rules, 2052 (1996)
4. Civil Aviation Rules, 2058 (2002)
5. Nepalese Civil Airworthiness Requirements (NCAR)
6. Flight Operations Requirements (FOR)
7. CAR - 2. Rules of the Air, 2008
8. CAR - 4. Aeronautical Charts, 2009
9. CAR - 5. Units of Measurement, 2008
10. CAR - 10. Aeronautical Telecommunications, 2009
11. CAR - 11. Air Traffic Services, 2008
12. Manual of Aerodrome Certification Procedures CAAN
13. Manual of Aerodrome Standards, Nepal (MASN) 2008
14. Exemptions Procedure for Non-Compliances at Aerodrome
15. Aerodrome Inspector Handbook
16. Air Flight Tax Act 2018
17. Dangerous Goods Handling Requirements 2011
18. Disposal of scrapped parts guidelines 2009
19. Draft Air Operator Certificate Requirements (AOCR) 2012
20. Personnel Licensing Requirements 2010
21. Airport Certification Regulation 2061 (2004)
22. Advisory Circular 02. Guidance for SMS for Aerodrome Operator
23. International Air Services Transit Agreement, 1994
24. Nepal Airlines Corporation Act. 2019 (1963)
25. Procedure for Recording Birds Strike Report (2010)
26. State Safety Programme (SSP) Nepal 2011
Documents not available (at this moment)
1. Civil Aviation (Investigation of Accident) Rules, 2024

2. Airport Charges Rules, 2038 (4th Amendment, 2061)
3. CAAN Financial Administration Regulations, 2057
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4. CAAN Employee's Facility, Service and Condition Regulations, 2056 (Amendment
2063)
5. Aviation Security (Management) Rules, 2064
6. The Aviation Policy, 2063 (2006).
7. Designated Check Pilot (DCP) Manual
8. Air Traffic Control Manual
9. Search and Rescue Manual
10. National Aviation Security Program
11. Airport Emergency Plan (AEP)
12. Flight Operation Inspector Manual (FOI)
13. Airworthiness Inspector Manual
14. Civil Aviation Medical Manual
15. Ground Handling Directives
16. Airport Charges rules 2038
17. AFIS (Aerodrome Flight Information Services) Manual
This list of documents evidences that Nepal has a considerable set of regulatory
instruments in the field of civil aviation, but does not evidence where the shortcomings can
be found.
ICAO’s USOAP Audit Report
In the final report of ICAO’s USOAP Audit the authors have pointed out the areas in which
they found the current situation to be lacking. Appendix 1 of the Report presents the
recommendations starting with a general prescription to revise Nepal’s basic aviation
legislation, summarized as follows:
“Nepal should revise its legislative framework and the supporting regulations to ensure that
they consistently address all the articles of the Chicago Convention as well as legal
instruments ratified by Nepal, for the scope of aviation activities conducted therein and
related safety oversight functions.
To that effect:
i. the Civil Aviation Act, 2015 (1959) should be amended to address the State's
obligations with respect to the Chicago Convention and its pertinent articles related
to safety oversight, as well as legal instruments ratified by Nepal, including Article 83
bis, and give effect to their proper implementation;
ii. the CAAN Act should be amended to ensure its consistency with the scope of safety
oversight activities and the authority vested in the Director General of the CAAN as
Chief Executive of a regulatory agency and should provide for the delegation of
authority to CAAN inspectorate staff to carry out identified and assigned safety
oversight functions; and
iii. the CAR 2002 should be amended to facilitate the implementation of an effective
safety oversight system enabling the timely implementation of all ICAO provisions
through a regulatory framework promulgated by the Director General of the CAAN.”
In subsequent recommendations the Appendix lists a considerable number of regulatory

measures to be adopted in the fields of:
 Primary aviation legislation and civil aviation regulations

 Civil aviation organization
 Personnel licensing and training
 Aircraft operations certification and supervision
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 Airworthiness of aircraft
 Aircraft accident and incident investigation
 Air navigation services
 Aerodromes
Meeting the requirements of the Audit Report will necessitate review of all the legal texts
now in effect, as well as those which are being prepared, with the basic aim of
introducing any changes that may be needed. The review should, nevertheless, look also
forward beyond current ICAO´s requirements and allow for the future development of a
modern civil aviation sector in Nepal.
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4.2 Planning
Nepal has no long term plans involving the air transport sector as a whole.
4.2.1 National Plan For Civil Aviation Development
4.2.1.1 Air Traffic Demand
The last Air traffic forecast in Nepal is tabulated below:
4500000
4000000 International Air passenger Movement in Nepal
3500000
3000000
2500000
2000000
1500000
1000000
500000
0
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Aviation sector in Nepal has shown a tremendous growth in air travel demand and in the
number of flights after the country adopted a liberal sky policy since 1992. The upsurge in
Nepalese immigrant traffic to Malaysia and the Gulf region especially from 2003 also
contributed to the high growth in air travel demand. International air traffic has crossed 2,7
million passengers in 2011, and the recent growth trend has been most impressive.
Air Pax. Growth Rates in %
25,00
20,00
15,00
10,00
5,00
0,00
2003 2004 2005 2006 2007 2008 2009 2010 2011
____________________________________________________________________________________________________
The main gateways for air travel from Nepal are still the airports in India (Delhi mainly), Gulf
region (Doha, Dubai, Bahrain), and Thailand. Emergence of new budget airlines from India
and the Gulf region has contributed to their dominance in the market.
35,0 31,36
Nepal's Main Air Travel Gateways in 2010‐2011
30,0
25,0
20,0 18,40
15,0
11,04
10,0 6,88 5,71 5,63
3,74 3,82 4,34
5,0 1,85 1,35 1,12 3,03
1,47 0,27
0,0
On the domestic front, there has been equally significant and consistent growth in air
traffic demand, especially the increased number of flights by small aircrafts. In 2011, the
seven fixed wing airlines and five helicopter operators together carried 1.58 million
passengers from Kathmandu airport and similar number at the 34 operating domestic
airports in Nepal. The leading carriers are Buddha Air and Yeti Airline about 72% of
domestic air passenger traffic.
Domestic Airline Share in 2011
Buddha
Yeti
Agni
Tara
Buddha Guna
43.6% Nepal Airline
Sita Air
Yeti Fishtail
28.4%
Mountain Air
Air Dynasty
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4.2.1.2 Air Transport
Bilateral: Nepal has signed bilateral air service agreements with 36 countries, the latest one
being the agreement with Turkey signed on September 24, 2010. This provides for 5.7 million
seats per annum to and from Nepal. However, not even 40% of this capacity is being
utilized by the operating airlines so far. The signing of a letter agreement with India last
year that multiplied seat provision five times to 30,000 seats per week and unlimited air
cargo flights between India and Nepal has ben a milestone in Nepalese civil aviation.
Airline Operators: Twenty-nine international airlines are presently operating 284 schedule
air services from Kathmandu to some 22 cities in Asia and Europe. Five new international
airlines started their air services to Kathmandu in 2010 (Kingfisher, Oman Air, Buddha Air,
Spice Jet and Indigo Air). Buddha Air started flights to Lucknow (India) from January 2011
and to Varanashi (India) from March 1, 2012. RAK Airways is the newest airline operating
services to Kathmandu from February 15, 2012. Among the other new airlines proposing
services to Nepal are Turkish Airline from Istanbul (October 2012), Air Lankan from
Colombo.
Thus, the number of international airlines operating air services from Kathmandu has
reached 29, and the number of flights they operate increased to 284 flights per week,
thereby producing some 47,523 seats for passengers and 914 ton capacity for cargo
movement from Kathmandu each week.
In the last one year, five new airlines (namely, Buddha Air International, Shree Airlines
International, Akashbhairav Air International, Goma Air and Skytech Heli Services were
licensed to operate air services and Air Operator Certificates (AOC) have been issued.
Three of them are fixed wing operators and two are helicopter companies. Under the
policy to access remote areas, single engine fixed wing aircraft and helicopter operations
have been facilitated to operate passenger and cargo services in remote mountain areas
of Nepal.
Out of the 86 aircrafts registered in Nepal, 69 aircrafts are in operational condition. This
includes 46 fixed wing aircraft and 18 helicopters. On the aviation sports side, five of the
eight companies who have acquired Air Operator Certificate (AOC) are operational. For
the promotion of tourism through aerial sports and entertainment activities, aviation sports
activities have been extended beyond Pokhara to Kathmandu, Bandipur and other
touristic areas of Nepal.
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4.2.1.3 Airports in Nepal
At present there are 54 airports including six under construction. Among these airports, 34
airports are operational with regular air services:
 International Aiport. Tribhuvan International Airport in Kathmandu.

 Domestic Hub Airports. There are 4 regional Airports: Biratnagar Airport, Pokhara
Airport, Bhairawa Airport and Nepalgunj Airport.
 Other Domestic Airports. There are 36 airports, only 29 in operation.
There is a new project for a second international Airport at Nijgadh.
Nepal is a mountainous country and most of the areas in western side are not linked by
road, so the air transport is the only mean of transportation. The Government has been
demanded to build new airports because of social connectivity.
Maintenance of many domestic airports is problematic and new airports are being built
under political pressure. Some strict criteria are needed for adding new airports.
In this aspect, CAAN Board has decided handing over the operation and management of
some 7 remote area airports in western Nepal to the local community (district
development committee) and the concept is in the process of government approval.
Tribhuvan International Airport
Significant progress has been made in the airport recently:
 Overlay of runway and taxiway

 One more parking bay has been added o make a total of 9 parking bays for jet
aircrafts.
 Additional baggage trolleys have been arranged to facilitate international
passengers.
 Arrival Walkway and sterile zone after internal security have been extended for 350
passengers.
 A separate helicopter parking area has been operational for up to 13 helicopters.
 Improvements have been made in the floor, wall and the electrical systems,
construction of Visitor’s Deck, Departure/ Arrival/ Passenger Enclosure and
reconstruction of main entrance gate have been completed.
Now, under a loan and grant contract between Nepal government and Asian
Development Bank signed on May 25, 2010, a loan of US$70 million and grant of US $ 10
million will be available for undertaking Priority 1A works in the first phase of TIA Master Plan
2026 in order to improve the capacity of air transport and flight safety in TIA.
In this context, a supplementary investment agreement has been signed between CAAN
and the Ministry of Finance, government of Nepal for US$ 70 million loan for infrastructure
development and US$ 10 million as equity capital investment for Detailed Design
Consultant and Supervision works. Under this program:
 Runway extension by 300 meters towards the south

 Install center line light on the runway
 Install new approach light of category I
 Construct a domestic terminal building of 10,000 square meters
 750 meters long parallel taxiway for air service operation as per ICAO Code E,
____________________________________________________________________________________________________
 Three link taxiways of total 797 meters
 New Apron of 515 x 152 m2.
 A New Hanger site to relocate Nepal Airlines and Army hangers to the east of the
runway.
 Reconfigure and refurbish international terminal building.
 Install Simple Approach Light to the north of the runway
 Installation of ILS Localizer in the south
 Installation of VCCS/VHF Communication in Operations building
 Install weather related equipments
 Additional foam tender to upgrade Fire Fighting and Rescue services of the 9th
category
 Establish sewage Treat Plant, establish drinking water processing center
In addition to the above, the loan and grant program for TIA will also cover some works at
Simikot airport, Rara airport at Mugu and Lukla airport.
Pokhara Airport
Pokhara Regional International airport is one of the national high priority projects in Nepal.
34 years ago Nepal Government acquired land of 158 hector for regional International
Airport. This site is 4 KM far (east) from existing Pokhara airport and potential for 2500 meter
length runway and can be constructed to ICAO 4D requirement.
Government of Nepal is willing to construct this airport from Chinese Exim Bank Loan. For
that CAAN has published a notice for Engineering, procurement and Construction (EPC)
contract Tender from Chinese eligible bidders on February 9, 2011. The last date of tender
submission is extended to April 24, 2012.
Some ongoing projects to allow direct flights to Lucknow in India at existing Pokhara
Airport:
 International Departure/ Arrival halls and a separate Arrival hall for domestic flights.
 Taxiway Loop
 Isolated Parking Position
Gautam Buddha Regional International Airport
An agreement has been signed between Nepal Government and Asian Development
Bank for US$28 million loan and US$6.41 million grant for the development of Gautam
Buddha International airport under South Asian Tourism Infrastructure Development project
to help develop tourism in Lumbini area and to diversify congestion at TIA.
Currently Gautam Buddha Airport (GBA) is operated as a domestic hub airport. The length
of existing runway is 1524m and is 30m wide.
Government of Nepal has received a US$28 million loan and US$6.41 million grant from
ADB through South Asia Tourism Infrastructure Development Project (SATIDP) for upgrading
the GBA to Regional International Airport. Financing agreement between ADB and
Finance Ministry was signed on April 25, 2010.
____________________________________________________________________________________________________
Design and Supervision consultant was mobilized from September, 2011 and right now
they are engaged on design works. Procurement process also has started on January 2012
for prequalification of contractor for civil works. Submitted prequalification applications
are under the evaluation. Probably the civil works contractor will be mobilized on October,
2012. Project Completion date will be 2015. Main activities are:
 New 3000 m length runway parallel to existing runway towards south New
international aircraft parking apron
 New international terminal building in existing unfinished one storied building
(vertical and horizontal expansion)
 Expansion and refurbishing of existing domestic terminal building
 New Control Tower Building
 New Customs and Cargo building
 Expansion of CFR building
 Interior roads improvement
 Diversion of Ghagra Khola
 Chainlink fencing around newly acquired land
 Water supply, storm water drainage and sewerage system improvement.
 Communication, navigational equipments installation including VOR / DME, ILS,
airport lighting and others
 CFR, X ray, security and meteorological equipments
National Airports
Civil Engineering Division is managing 3 mega projects and 40 airport projects with strength
of only 12 engineers. So, specialized human resources are not sufficient in this area:
 For the improvement of Simikot airport, land acquisition and runway black
topping works are initiated.
 Similarly, black topping of runway, taxiway and Apron at Tumlingtar airport are
being taken up.
 Efforts are made to make Rajbiaj airport operational again.
 Flight operation at Manamayarai Khanidanga airport at Khotang district has
started after completion of runway.
 Simple Approach and Airfield Lighting works have been completed at
Nepalgunj airport.
 Land acquisition, security chainlink fencing have been completed at Manang
airport and black topping of runway, taxiway and Apron has been started.
 Works on Parking Apron extension at Surkhet airport for Fixed and Rotary Wing
aircrafts are progressing.
 New terminal building, control tower, office building works at Dhangadi airport
have been contracted out.
 Reconstruction works of airport terminal building/ tower, Police residence and
staff residences at 10 domestic airports (Bhojpur, Phaplu, Lamidanda, Dolpa,
Rukum (Salle), Rukum (Chourjhari), Bajhang,Jumla, Bajura, Sanfebagar),
damaged during the period of conflict.
 Improvements in runway at Taplejung airport has started.
 Construction of terminal and tower buildings at Khanidanda (Khotang),
Thamkharka (Khotang) and Kangeldenda airports.
 Construction of Parking Apron area and improvement of runway orientation
and gradient have been started at Rura (Mugu) airport.
 Construction of Partial parallel runway at Biratnagar airport has been started to
improve the runway capacity of the airport.
____________________________________________________________________________________________________
Second International Airport
In 2007, Government of Nepal decided to build full flagged Second International Airport
(SIA) in Bara, Nijgadgh through BOOT Scheme. One Korean private company conducted
detail feasibility study and submitted a proposal to Nepal Government through BOOT
scheme. This report is under study in the Ministry of Tourism and Civil Aviation.
Decisions on this project will affect severely to the Capacity Development Plan of the Civil
Aviation Authority of Nepal.
4.2.1.4 Air Navigation
Air Traffic System (ATS)
The most important facilities for ATS in Nepal are:
 Area Control Center in Kathmandu.

 Control Tower in TIA.
 Radar in TIA
 5 VOR. Kathmandu, Biratnagar, Simra, Bhairhwa and Nepaljung Airports.
 DME at Pokhara Airport.
The most important issue to solve is the automation of the systems and the training,
specially the refreshing training, every year or two years the ATC controllers must have
some refreshing training.
Communication, Navigation and Surveillance (CNS)
b) Communication. All the facilities and equipment are being renewed. Ending 2012,
everything might be finished.
Easter Nepal is going to have new Radar. In a few weeks CAAN will try to look for the
location.
Western Nepal has some coverage problems, because of the geography.
c) Navigation. Some improvements are coming also in this area.
d) Surveillance. There are two different plans to replace the radar system.
1. ICAO project
2. Japan Airport Consultant Project.
There are some other issues according to the aircraft operation.
 Protection of the ATS/CNS installations

 In order to operate the airports during the night, some noise maps must be
developed.
 Improve the obstacle control, improving the process between CAAN and the
municipalities.
____________________________________________________________________________________________________
 Some new airport infrastructures are coming and the man power into these
areas is not enough to attend all the different areas. The recruiting procedure in
CAAN takes longer than constructing process; new staff must be well trained.
 Coordination between MOTCA future plans and CAAN capacity development
plan.
4.2.2 Corporate Business Planning
There is no corporate business plan nowadays in the Civil Aviation Authority of Nepal.
There are Annual Reports including Cash-Flow and Balance Sheet. These reports are not
for individual airports, only consolidated data for the global CAAN.
Regulator, Airport operator and Air Navigation System operator are not separated into the
Balance Sheet.
Annually, the Ministry of Tourism and Civil Aviation provides a budget for CAAN. CAAN
doesn´t control the revenues generated by the Air transport system.
According to the assigned budget, CAAN must develop new infrastructures and maintain
the existing ones, including operational costs.
There is no clear definition about the aeronautical and non-aeronautical revenues.

Depending on the different informers, non-aeronautical revenues can go from 5% to 25%.
Last year the Net Profit after taxes was close to 27% of the revenues, but this is something
we must analyze in a longer period, in order to know if the air transport system can go
alone.
A committee of Ministry of Commerce and Supplies organized to study prevailing cargo

rates at Dhaka and New Delhi airports has completed and submitted their report to the
Ministry in order to review air cargo rates and charges as per an agreement between TIA
Civil Aviation Office and Nepal Transit and Warehouse Management Company Limited for
the operation and management of Air Cargo complex at TIA.
According to the current accountability system, everything is controlled by hand. They

need to improve this area using a Financial Information System.
They must improve Man power skills in this area:
o IT and Computerization skills of the staff involved in finance area.

o VAT legislation.
o Financial Information System
4.2.3 Private Sector
Actually, the Aviation Policy, 2063 (2006) introduces the participation of private sector into
the aviation sector.
____________________________________________________________________________________________________
“ In developing air transport infrastructure structures, the investment of native/foreign
private sector will be open on the Build-Operate-Transfer (BOT), Operate-Transfer(OT),
Build-Own-Operate-Transfer)BOOT) basis or any other appropriate basis”.
Private sector participation in aircraft operation, training, repair and maintenance and
passenger service provider industries:
o International airlines. Up to 80 percent
o Domestic airlines. Up to 49 percent
o Flying School. Up to 95 percent
o Repair and maintenance. Up to 95 percent of the institutions
The Private sector is also going into the airport sector, not only building the airports, but
also operating them in the future. (Company Act)
The different Methods included in the Nepal Legislation are:

o Build and Handover
o Build, Operate and Handover
o Build, Holding Ownership, Operate and Handover
o Build, Handover and Operate
o Lease, Operate and Handover
o Lease, Build, Operate and Handover
o Developed, Operate and Handover
If the private participation goes into the airport operation, it will be necessary to start with
some organizational and regulatory changes in order to avoid competence problems
between CAAN (regulator and operator) and private companies.
Private sector participation in managing Lukla, Biratnagar and Surkhet airports are under
study. SIA project is looked after by the Ministry of Civil Aviation,
The construction and operation by a private company of the Second International Airport
in Nepal will bring some regulatory and organizational changes into CAAN.
4.2.4 Non-Aeronautical Revenues
There is no clear definition about the aeronautical and non-aeronautical revenues.

Depending on the different information, non-aeronautical revenues can go from 5% to
25% of total revenues.
It is necessary to clearly define the non-aeronautical revenues, explore new areas of non-
aeronautical revenues so as to facilitate air transport development.
4.3 Restructuring
Currently, CAAN is taking different roles into the air transport:
o Regulator
o Inspector
o Airport Operator
o Air Navigation Operator
____________________________________________________________________________________________________
In order to be compliant with the international best practices and in order to let the
private sector go into the airport and/or air navigation operation, CAAN must be
restructured.
The restructuring process will bring us many regulatory, and organizational changes.
The new Organizations must be economically independents and compliance with the
safety international regulation of this type of organizations.
A new salary policy must be developed in the different organizations according to their
new roles and responsibilities. Nowadays, this area is not well defined. In TIA there are
some people with a lower organizational level than other and a higher salary.
The current recruitment process is not solving the problems of staff in CAAN. It is difficult to
have well trained personnel in order to substitute people in retirement.
Now we haven´t got any information about the restructuring plan of CAAN.
4.4 Human Resources Training Program
STAFF STRENGHTH IN CAAN

APPROVED PERMANENT POSTS 1065
EXISTING Nº OF EMPLOYEES
CAAN Head Office 143
Tribhuvan Intl Airport 429
Civil Aviation Academy/Other Offices 298
Currently Working Manpower 870
Currently CAAN is close to 200 people under their defined organization.
The Civil Aviation Academy is providing basic training in several areas to the CAAN staff,
but for Advance Training the staff are sent abroad and this is very expensive for CAAN.
There are only 12 trainers into the Academy, but sometimes they use external trainers also.
The courses are not defined into the Academy; they contract external consultants to
develop them.
The Academy is using ICAO Annexes for training material.
The Civil Aviation Academy provides training not only to CAAN staff, but also to external
staff.
The Academy has not revenues from CAAN students neither from Police students. They
only have some revenues from the external students (airlines, etc.)
The Academy has problems with IT, including computers and equipment for the courses.
The Academy doesn´t have a Plan to develop the courses that CAAN staff is demanding.
The recruitment process, joined to the difficulties to have trained staff in CAAN is bringing
some problems in specific areas as fire and rescue, ground safety and IT.
____________________________________________________________________________________________________
4.5 Computerization
Actually, CAAN has no Computerization Plan.
The computers in CAAN are old and people are not trained to use them. More than 90% of
CAAN staff has problems using computers.
4.6 MIS
Actually, there is no Management information System in CAAN Headquarters. Mostly

information is written by hand and there are not soft copies of them.
An agreement with SITA has been signed to operate Common User Terminal Equipment
(CUTE) system in the check-in area of TIA. Required software and hardware are ready for
their operation soon after a MOU with airline operators.
There is no Financial Information system in CAAN. They only use Excel Program from
Microsoft Office Software.
____________________________________________________________________________________________________
5 METHODOLOGY OF WORK
5.1 Legal
As a result of the meetings held during the days 27/03 to 30/03 The initial formulation of the
work program has been revised in order to prioritize certain tasks which were considered
as the most urgent by CAAN. In the meeting held with representatives from the Ministry of
Tourism & Civil Aviation the new priorities were also ratified as most befitting the current
situation in Nepal regarding civil aviation.
While the final aim of the project is to fulfill the requirements arising from USOAP Audit
Report, it was agreed that work should concentrate first in dealing with the issues related
to the Civil Aviation Act and the CAAN Act. Preliminary interest has shifted from the in
depth review of the current regulatory instruments to the definition of key policy issues.
This implies determining the best strategy to approach the review of both Acts taking into
account:
 specific problems to be resolved,

 need to insure growth beyond ICAO’s requirements,
 need to reorganize the civil aviation administrative setup in order to
accommodate the separation between regulatory functions and service
providing functions,
 privatization of service provision
 introduction of private initiatives.
Given this context, the agreement was that the priority for the legal consultant should be
to prepare a report on the review of the current acts, in order to formulate proposals
regarding the available options and the most promising route to follow in view of current
circumstances in Nepal and taking into consideration foreign experiences on the matter.
The Ministry of Tourism and Civil Aviation mentioned also the need to take into account
the work that is currently underway on two new acts in the field of civil aviation, one on air
transportation and the other on air carrier licensing. The contents of such acts will have to
be considered in order to either integrate part in the new civil aviation acts or, at least, to
guarantee the highest degree of coherence among all the legislation governing civil
aviation and related topics.
The report would focus on:
 Scope of the revised legislation: the baseline is to cover all ICAO Convention’s
requirements, but should provide the framework to go beyond basic
requirements.
 Should the two existing acts be consolidated into a single text?: alternatives,
pros and cons.
 How detailed should the provisions of the act or acts be?
 Dealing with the requirements derived from the need to separate regulation
and operation. What should be revised in the CAA Act?, what in the CAAN
Act?
 Impact of the introduction of private initiatives
 How are air transportation and carrier licensing regulated in other systems? Pros
and cons of including such topics into the new Civil Aviation Act.
____________________________________________________________________________________________________
After discussion with CAAN, the report would result in the preparation of a presentation to
raise awareness of these issues among higher government officials and political
representatives.
The first report would be shortly followed by a second paper on the issue of privatization,
exploring available options to introduce privatization before the CA Act and the CAAN
Act are revised. In these context the term privatization designates not only the process of
entrusting some of the operations currently performed by CAAN, but also the introduction
of new operators, as is the case with the proposal for a new private initiative airport which
now under consideration.
The main issues to explore will be:
 Can privatization take place without reviewing the existing acts?

 What legislative/regulatory changes are required in order to introduce
privatization?
 How far can privatization go without changing the CAA and CAAN Acts?
 What are the probable repercussions of privatization on the current structure
and financial system?
 Can privatization take place without prior separation of regulatory and service
provision functions?
 How do these issues apply to the establishment of a new airport under private
operation?
The paper will analyze these issues in the light of current legislation in Nepal (both aviation
legislation and investment legislation) and taking into account the experience in other
countries.
Once the debate on the review of the current Acts is well under way, the main focus of
the consultant will shift towards the in depth analysis of the regulatory system, in order to
determine what specific elements of the current rules and regulations have to be modified
in order to meet the requirements of the USOAP Audit Report as well as the future
development and improvement of the civil aviation sector.
This will require the examination of all the regulatory documents (including manuals and
other guidance materials) and detailed interviews with the persons responsible for the
different areas, in order to pinpoint current shortcomings and possible improvements
beyond the strict limits of the Audit Report.
In this regards it is worth mentioning that initial meetings with those responsible for ATM,
CNS and ground safety, held at Tribhuvan International Airport, expressed their concern for
the lack of effective regulation of implementation in areas like obstacle proliferation,
wildlife control or coordination with local authorities. Some concern was also voiced
regarding the need to approach the noise issues which might hamper the full operation of
the airport in the future, especially at night.
In many of the meetings the consultants attention was drawn also by the participants to
the issues deriving from the current organizational framework and budgeting, staffing and
training shortcomings. Such concerns will be the focus of the consultant’s work when
reviewing the proposals for restructuring and possible privatization and will be the object of
specific reports and proposals.
____________________________________________________________________________________________________
SCHEDULE PROPOSAL
Taking into account the priorities arising from the first set of interviews with CAAN and
Ministry of Tourism & Aviation officials, the consultant considers that the project tasks
concerning legal and administrative or institutional issues could be organized according to
the following schedule.
Report on the review of the Civil Aviation Act and the CAAN Act:
 First draft to be submitted within 3 weeks from the date of the inception report.
The report could be refined by means of e-mail discussion and would be
personally debated in interviews which could take place during the week of
May the 14th.
 Completed report and presentation by May the 18th or 19th at the end of the
legal consultants visit to Kathmandu.
Report on privatization options and implications for the legislative review:
 First draft submitted 2 weeks after the report on the review of the Civil Aviation
and CAAN Acts.
 Discussion and finalization of the report would take place during the legal
consultant visit to Kathmandu during the week of May 14th.
Draft new legislation:
 At the request of the CAAN the consultant would prepare draft legislation
embodying the results of the reports and the discussions sustained in
Kathmandu. Such draft legislation would include the detailed outline of the
future act or acts, and an indication of the contents of each article. Since the
actual acts will have to be drafted in Nepalese, the consultant considers that
special consideration should be given to concepts rather than to specific
wording.
 Such draft legislation would be submitted by the consultant during the first
week of June and refined via e-mail discussion over the following weeks.
Detailed regulatory review (Regulations, CARs and guidance materials):
The purpose of the review is to pinpoint all possible differences with ICAO’s SARPs and to
decide the best way to meet the requirements of the USOAP Audit Report, as well as those
improvements that may be considered necessary or convenient for future development.
 Report on the review and proposal for review of all regulatory documents, to
be completed by the end of August.
 The report would be refined both by corresponding with CAAN officials and in
the course of interviews to be held in Kathmandu during the first week in
September.
Review the proposals for restructuring CAAN as a regulator of civil aviation, and for
creating a new state authority to operate the national airports and the air traffic and
navigation system
____________________________________________________________________________________________________
 Information on such proposals would be provided to the consultant during the
visits to Kathmandu to take place in the months of May and September and by
any other means at such time as CAAN considers convenient.
 Reports on such proposals will be provided a the demand of CAAN –MOTCA
and meeting to discuss them and outline legal requirements for their
implementation could take place in mid October.
Draft legislation to establish new state authority to operate the national airports and air
traffic and air navigation system
 To be submitted before the end of November and subsequently refined before

the end of the year.
____________________________________________________________________________________________________
5.2 Planning
The Consultant is going to analyze the current situation of air transport in Nepal, we have
to know the existing plans (short term and long term), the working projects (new
international airport, others), the agreements in this area with any other country, company
or institution and of course the existing infrastructures dedicated to air transport (airports,
air navigation infrastructures and equipments, airlines, handling agents, industry, etc.)
Based on an Air traffic forecast, including not only international, but also national
passengers on different airports, The Consultant is to develop the National Plan for Civil
Aviation Development (NCADP), including the air transport, the airports, the airspace and
air navigation and of course the paper of the civil aviation administration according to all
these actors.
According to the nature of this project, the Consultant is to develop a Corporate Business
Plan, including near-term operations of CAAN and a five year initial operating period for
the new organizations (the new Civil Aviation Authority of Nepal and the new Airports and
Air Navigation Services Authorities).
On the other hand the Consultant analyses the possibilities of the private sector into the
NPCAD, via outsourcing of services, concessions, engineering services, etc, with a cost &
benefit analysis of the proposals and risks involved.
Once we finish with the air transport sector, we move to analyze the non-aeronautical
revenues generating activities to develop a plan that includes additional commercial
opportunities.
5.2.1 National Plan For Civil Aviation Development
AIR TRANSPORT FUTURE AIR
AIR TRAFFIC NATIONAL PLAN FOR CIVIL
CURRENT TRANSPORT
DEMAND AVIATION DEVELOPMENT
SITUATION CAPACITY
Review of existing Air Traffic Forecast: 1. National Air

plans and regulation Passengers, Transport Plan
Aircraft movements
Review of existing and cargo 2. National Airports 20 year
infrastructures Plan development Plan
‐ International
Review of existing ‐ National 3. National Air
Air transport market Space Plan
a) Existing Plans and Regulations.
The Consultant reviews the Civil Aviation Sector Study (ADB TA 4772-NEP) and analyses the
current legal and regulatory framework international and national governing the market
entry, regulation and operation of the air transport in Nepal, with the aim of verifying
deficiencies that could eventually jeopardize the development of the air transport in
Nepal. (tasks 13 &15)
____________________________________________________________________________________________________
This analysis includes laws and other legal texts governing Air Transport, in order to
understand the existing rules, and check their suitability for a smooth and plausible
development of air transport, airspace and airports, thus providing the regulatory
significance these rules have for the Nepalese economy. (task 16)
The Consultant takes into account international regulations (ICAO, IATA) applicable in
Nepal, as well as the organizational structure of the Civil Aviation Authority, in order to
understand the scope and enforcement.
b) Existing Infrastructures and Equipments
The Consultant is to identify all the infrastructures related to air transport existing in Nepal,
compiling all the information according to the current situation and actions defined.
The Consultant will include airport infrastructure and air navigation infrastructure and
equipments.
c) Existing Air Transport Market
The Consultant is to identify the current situation of the major domestic and international
airlines operating in Nepal: (task 17)
• Profile & Ownership

• Fleet & Route network
• Financial situation
• Agreements with other carriers. Membership of global alliance
• Business strategic & Market positioning
• Traffic volumes
• Personnel
The Consultant shall also identify other agents in air transport chain as handling agents,
cargo agents, suppliers, manufacturers, maintenance agents, catering, etc.
5.2.1.1 Air Traffic Demand
The objective of this section is to create an updated traffic forecast based on: Nepal’s
current and estimated air transport market (passenger, passenger and freight), air traffic
forecast for Tribhuvan International Airport (TIA), the establishment of future infrastructure
requirements, the identification of potentially profitable domestic air service routes in the
future (task 18), the evaluation of the expansion of international services and the entry of
new international carriers in the international market. This forecast will form the basis for
revenue estimation in Corporate Business Plan.
The necessary hypothesis to make this forecast, including historical traffic and its probable
future behavior, is formulated. It is essential to design future traffic scenarios so as not to
have only one forecast, but several, according to the evolution of the initial hypothesis.
Additionally, the more suitable forecasting tool shall be selected for the conditions of the
airport and depending on the data availability.
The Consultant has extensive experience and ‘know how’ in air traffic forecasting.
Programs as SPSS are commonly used as a tool to implement all the assumptions and
____________________________________________________________________________________________________
variables which affect the evolution of traffic figures. The versatility and strength of these
statistical tools provide our forecasting experts with the instrument for selecting the most
suitable methodology for the Airport depending on the characteristics of the data and
variables that define the airport performance. All this knowhow and top notch techniques
shall be applied for the development of the air traffic forecast for Tribhuvan International
Airport (task 14), as well as the other airports included in this study, in which case the
methodology for national airports with a few movements per year is going to be different
and will be a part of a global traffic forecast inside the country.
The methodology to calculate the air traffic forecast of the principle Nepalese airports will
be:
 Socio economic data: the Consultant is to analyze the economic and social
aspects of the Nepal’s economy, which sustains the air transport market,
including tourism and demographic data (demographics, income per capita,
GDP by economic sector that may affect air traffic, emigration, foreign trade,
foreign investments, tourist arrivals, price of oil, etc).
Our approach includes data collection to/from meetings with Nepal’s

authorities on Civil Aviation, Tourism, Airline associations, and tourism
associations and economic studies from the World Tourism Organization, IATA,
Airbus, Boeing, and Airports Council International- ACI should also be
considered.
Available forecast assumptions might be used in the development of

economic context.
 Historical analysis of traffic: the Consultant is to analyze the historical traffic for
passengers, aircraft movements, cargo and mail, through the statistical data
collected.
 Analysis of primary data: In this section, the segments of demand are defined,
both passenger and cargo operations and taking into account such factors as
the reason for travel (tourism, business, general aviation etc.). The
characteristics of travel, practice costs, imports / exports, etc.
The forecast of demand for passenger, aircraft, cargo and mail. (tasks 17 & 18)
____________________________________________________________________________________________________
5.2.1.2 Strategic Analysis
Once CAAN approves the air traffic forecast, the Consultant begins to evaluate the
measures that have to be developed for the forthcoming 20 years, which are translated
into the following plans:
 National Air Transport Plan

 National Airports Plan
 National Airspace Plan
All these plans will be developed in an only aspect, to modernize, adequate and
guarantee the safety and capacity of the air transport in Nepal on a sustainable
environment (economically, technically, environmentally and socially).
At this point the Consultant will be prepared to do a complete SWOT Analysis of the
current situation of the Nepalese Air Transport.
The objective of the SWOT analysis is:

 The assessment and exploitation of market opportunities
 The minimization of impacts from threats affecting the air transport.
 Provide actions to convert weaknesses into strengths
 Promote the strengths of the Nepal’s air transport system to differentiate it from
other neighboring countries.
We will use this part to develop no only the National Air Transport Plan but also the whole
NPCAD.
____________________________________________________________________________________________________
5.2.1.3 National Air Transport Plan
PHASE I PHASE II PHASES III & IV

Current Strategic Strategic
Situation of Analysis Planning
Air Transport
AIR TRANSPORT
INDUSTRY DEVELOPMENT
POLICY
CONSTRAINTS NATIONAL
SWOT AIR
CONTROLS ANALYSIS TRANSPORT
PLAN
STRATEGY OF AIR
STRATEGIC
TRANSPORT MARKET PLAN
(DEMAND)
On the basis of the previous phases, the Consultant is to draft a Policy on the Development
of Domestic and International Air Transport. This policy contains the following tasks: (29)
 Overview
 Vision
 Objectives of the policy / Open skies policy
 Tariff policy
 Social objectives and minimum service requirement
 Competition policy and method of entry for private operators
 Airline license
 Domestic and regional operations
 International operations
 Market access
 Promotion / Development of Aviation Sector
 Aviation security & Aviation safety regulation and investigation
 Government taxes and duties
 Commercialization of airports
 Import of aircraft
 Aviation support services
 Airport charges, Taxes & Duties on Import of Aviation Related Equipment
 Air traffic services
 Human Resource Development
 Consumer protection
 Aviation and sustainability
 Implementation of Policy
1. Airlines
In the first place, the Consultant will be carry out a set of interviews with the major
domestic and international airlines operating in Nepal in order to gather information of the
air carrier and to discuss business strategies (new routes and frequencies, future fleet, etc),
and air traffic forecast.
____________________________________________________________________________________________________
Then, the Consultant develops different scenarios for the future evolution of the domestic
air services transport infrastructure, defining its fleet, route network, and size of the industry,
unconstrained by existing airport characteristics. (task 21)
Each scenario is analyzed against agreed upon policy objectives and development
criteria, in order to develop a recommended strategic approach to the creation of a
sustainable national air carrier operation in order to serve domestic and international
destinations where feasible. (task 22)
2. Regulations
The international character of air transport also requires international framework, which
defines a minimum set of regulations, common to all countries. Likewise, the defense of
trade interests leads to the realization of private agreements between two or more
nations, on the most important aspects of transport, not covered by the general rules.
The regulation of international air transport services comprises both multilateral and
bilateral agreements involving Governments and airline companies.
The international and national civil aviation legislation in Nepal is derived from the
Chicago Convention 1944, and the first action is to review the legal instruments applied to
the market entry, regulation and operation of the air transport in Nepal.
Assess the legal and regulatory environment for foreign and domestic private provision of
air transport on domestic routes, and the constraints.
3. Air services agreements
The transition from a primarily bilateral regime to an increasingly “multilateral” regime

raises intricate issues with solutions not always straightforward. For this reason, the task 19 is
very important. Due to the shape and size of the air transport the systems can be affected
by governmental decisions, notably those determining the type and extent of economic
regulation of airlines.
The task will be initiated with the gathering of the entire set of air services agreements held
between Nepal and other nations, in order to review the legal authority of these ASA’s
and the conditions applied.
For that, it will be necessary to review the following issues, among others:
 Capacity, double approval of tariffs, traffic rights, and routes of specific cities
being served; and
 Carriers operating the agreement traffic rights
Access to the air transport market (entry market): a route is determined by the points
(cities) served by an airline and therefore effectively represents the market of that airline.
Typically, Governments agree bilaterally on the routes on which traffic will be carried,
often involving one or more specific gateways in the home country and one or more
gateways in the foreign country.
Depending on the type of ASA, the number of routes or points can be limited or unlimited.
Charter rights can be included. Fifth freedom right (or beyond rights).
____________________________________________________________________________________________________
 Designation: ownership and control criteria (a designated airline is to be
substantially owned and effectively controlled by the Designation State or its
nationals).
 Capacity: a quantitative measure of the supply of an air transport service,
usually expressed in terms of aircraft, passenger seats and/or units of weight or
space, and frequency of a particular air service. Controlled capacity and
frequency or not. Reciprocity or equal and fair opportunity to compete.
 Tariffs: pricing policies. Tariff agreements and system of interlining. Double
approval of tariffs or double disapproval of tariffs. Tariffs refer to cost-effective.
This process will be completed with a set of meeting with senior government staff to discuss
the limits and conditions imposed on foreign carriers and Nepalese carriers, like capacity,
traffic rights, tariffs, access to the market, designation, etc. In order to determine where
apparent limitations and conditions might inhibit the further development of air transport
links or the development of services by Nepal’s carriers (task 19).
And, finally, (task (28) advises MOTCA and CAAN on policy and strategy for international
bilateral negotiations, such as maximization of the value of freedom rights, and
appropriateness of open sky agreements, and the potential for development of additional
international airport hubs, and their effect on the financial performance of TIA.
For that, the Consultant will analyze the latest regional trends concerning the granting of
commercial air rights, by examining the experience in the European Union (where even
granted eight freedom right), and the open skies treaty between the United States and
the European Union, which entered effective on March 28, 2008.
4. Competition and tariff policy
The liberalization of air transport and the gradual move towards free skies, in the context of
increasing freedom, makes necessary to safeguard fair competition between carriers, and
to avoid practices detrimental to competition. For example, fares below costs, the
addition of excessive capacity or frequency of service, or the abuse of dominant position
in a route.
For this reason, the Consultant reviews and evaluates existing policies on competition,
tariffs, and capacity entitlements, in order to enhance the international services to and
from Nepal, and the entry of other international carriers.
5. Sustainability of the Air Transport System
In order to ensure the territorial connectivity and the sustainability of the air transport
system in Nepal, it is necessary to carry out a set of actions to encourage domestic and
foreign investors in air transport to provide domestic services and to finance public service
domestic routes.
The granting of subsidies is justified on social grounds, such as the need to ensure minimum
levels of service to remote areas. The argument in favor of such subsidies depends on the
criteria applied and the definitions used to justify them.
For that, in the first place, the Consultant will review with the MOTCA the Government’s:
____________________________________________________________________________________________________
 Social Objectives. The minimum service requirements on all domestic routes
based on these objectives. (task 23)
 Tariff policy. the Consultant reviews the tariff policy for domestic routes and will
evaluate the constraints of these on private operation of domestic air transport.
After review the tariff policy, the Consultant will make recommendations on an
appropriate tariff policy in order to encourage private operators while meeting
social objectives. (task 24)
 Subsidies. Evaluate various mechanisms for attracting domestic or foreign

investors in air transport to provide domestic services and identify alternative
financing mechanisms to subsidize unprofitable but socially necessary routes.
(tasks 25 & 26)
There are several forms of subsidies. The most prominent are restructuring subsidies, cross
subsidies and social subsidies.
The restructuring subsidies have become increasingly important as liberalization evolves in

world markets and airline companies demand support in order to adjust toward lower
costs and greater competitiveness. But the difficulty with restructuring subsidies is the
distortions to competition they clearly introduce. Even in cases where the stated purpose is
to avoid the distortion of competition, it may still not be easy to determine the extent of
the effect of non-commercial aid to a particular air carrier on overall supply and demand
conditions.
The cross subsidies consist of the possibility of negative bids for unprofitable routes and
cross-subsidies from profitable routes.
6. Analysis of Future Fleet
This section analyses the fleet mix expected to operate at Nepal’s airports, taking into
account new routes, fleet standardization of policies and the emergence and
disappearance of certain models of aircraft. Including:
 Critical aircraft. To determine the critical aircraft the Consultant shall analyse
not only aircraft currently operating but also those in the country but those
employed by the airlines of the surrounding countries.
 A consultation with the major manufacturers of aircraft (Embraer, Boeing and

Airbus) on the performances of their new models. From the responses obtained,
the weights are fixed at the maximum allowable takeoff and landing, and
calculate the economic feasibility of the routes listed above.
 A380: As an improvement to the terms of reference we will discuss the possibility

of the A380 in the Nepal market.
7. Prospect new air service routes
And finally, in order to promote new routes from and to Nepal, assess the potential of the
Nepal air transport market, through the identification of planned or likely routes and
frequency growth by domestic and international airlines.
____________________________________________________________________________________________________
The scope of work for this sub assignment includes:
a. Analysis of Nepal air transport market.

b. Main characteristics of Nepal domestic market.
c. Estimate the extent of the future international air transport market that will be
necessary to be served by the international airports of Nepal (new routes
and/or frequencies). (task 20)
d. Evaluate the potential for the expansion of international scheduled and short-
and long-haul charter services to and from Nepal. (task 27)
e. Evaluate the viability of the entry of other international carriers.
The approach for carrying out these activities and obtaining the expected output is the
following:
1. Review all available documentation on market studies and route development

from Nepal
2. Meet with airport operators, particularly TIA. Airports are an important source on
route development, as their marketing teams have a good grasp on future route
prospects
3. Meet with international carriers in Nepal (see Airlines section)
4. Meet with professional association’s bodies.
The outcome will be a 20 year passenger, aircraft, and freight air traffic forecast.
Additionally, the Consultant will identify costs associated with the development of air
transport (task 30) to appoint all the necessary investments in order to enhance the air
transport system according to National Air Transport Plan. For that, the Consultant will carry
out the following tasks:
 Description of investment
 Period required (phasing of investment): Identify the best moment to perform
the investments.
 Implementation schedule: to scale in time the different investment programs.
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5.2.1.4 National Airports Plan
Nowadays in Nepal there are 54 airports, including six under construction, one
international airport (Tribhuvan International Airport), four regional hub airports (Nepalgunj,
Biratnagar, Bhairawa and Pokhara) and 43 local airports, but only 34 have operations.
Some important projects are been developed now: the Second International Airport in
Katmandu, the new international airport in Pokhara, the possibility of upgrading Bhairawa
airport as a regional international airport and the construction of five more local airports.
The Consultant will analyze all this projects and will include them in the study. (task 34)
The Consultant then studies the current situation and will develop an airports strategy for
the future and will express this strategy in a National Airports Plan.
Second International Airport
According to the importance of this new Airport, the Consultant will help to CAAN in order
to analyze some issues in this matter. Actually the Ministry of Tourism and Civil Aviation
(MOTCA) is going to ask for some issues to CAAN. The Consultant will provide expert
support in the areas that CAAN will require in this issue, explaining clearly how this airport
can affect to the capacity Development Plan of CAAN.
This task will be scheduled in the Plan, and the time will be completely open.
____________________________________________________________________________________________________
Inventory and
Strategic Analysis Capacity/Demand National Airport Plan
Diagnostic
SWOT Analysis International Airports
Airports Inventory
20 year
Airport Classification Regional Hub Airports Airports
Investment Program
Airport Diagnostic
Airport Standard Definition Local Airports
Inventory and diagnostic
The Consultant is to develop, in the first step, an inventory and diagnostic of the current
infrastructure of Nepal’s airport operative network including: (task 31)
 Existing airport infrastructures. Airside, Landside and accessibility.

 Real state of the airport infrastructure
 Compliance with ICAO safety standards
 Airport role. Identification of the airport current users: tourism, local transport,
emergencies, security, etc.
 Developing possibilities
 Social and environmental impact.
For this purpose the Consultant shall visit the airports with the CAAN staff. At the beginning
of the project will prepare together a schedule and a planning of the visits to do.
Strategic Analysis and Airport Classification
With the information, not only about airports but also about air transport (airlines, private
companies, traffic forecast) we are going to develop a SWOT analysis; with this analysis
the Consultant classifies the airports in several categories.
We will begin with the current classification:
 International Airports.
 Regional Hub Airports
 Local Airports with road transport Access
 Local Airports in remote Area
But the Consultant gives the future airports classification (several categories) according to
different level of importance to the Nepalese economy, indicating the current situation of
the airports and their future position, including of course, the analyze of the SIA project, the
new Pokhara airport and the possibilities of Bhairawa Airport, new local airports needed,
etc. the Consultant will propose new infrastructures for the development of tourism, social,
security or any other consideration.
The Consultant develops an airport standard for every category, indicating minimum
infrastructures necessaries on every category. These standards give us the minimum
____________________________________________________________________________________________________
requirements not only for the airport infrastructures, but also for equipments, staff,
maintenance and protecting areas.
We also, study in this part the economical situation of the airports, and we will associate
different strategies for the different category of airports. Local airports are very difficult to
be financially self-sufficient, and we have to work thinking in a global air transport self-
sufficient as we will see in the business plan of the airport operator. The most important
airports in the countries usually finance the small ones, in the case of Nepal, we have a lot
of small airports in difficult access areas, so we will study and identify the global situation of
the air transport system in the Business Plan developed in component 2B.
The Consultant will determine which airports are socially necessary to maintain,
independently of the economical and financial situation. (task 33)
Capacity-Demand Analysis
a) International Airports: The international and regional hub airports will have a
capacity-demand analysis including all the different parts of the airport, if it’s
necessary to know what infrastructures are needed and when they need them.
the Consultant will determine the requirements for additional international airports in
Nepal, based on transport and tourism considerations; especially we will study the
prospects for an alternative international airport in Kathmandu, an international
airport in Pokhara and the upgrading of Bhairawa airport to regional international
traffic, indicating the future role of all these airport infrastructures. (task 34)
b) Regional Hub Airports: the Consultant will prepare a capacity-demand analysis

including only the principal parts of the airport, due to the real size and traffic in
these infrastructures.
c) Local Airports: Mostly actuations needed at the local airports were caused for ICAO
non-compliance rules and the infrastructure conditions, but not for capacity, but the
Consultant will develop a plan to evaluate the future requirements of every airport
included in the study in case of low capacity.
With all this information the Consultant will establish the airport development needs for all
of the national airports according to the classification already done. (task 32)
National Airports Plan
Having the infrastructure and facilities requirements study as a kick-off milestone, in this
assignment the Consultant will estimate which of these requirements will be a priority for
the country’s benefit. the Consultant will develop a National Airports Plan including 20 year
investments in Nepal Airports and the phasing of improvements. (task 35)
These investments will cover all aspects related to the airport system. It means, not only
airport infrastructure in the strict meaning, but also supporting facilities at the Airport like
lighting system, drainage system, etc. The investment program will be based on the
capacity – demand analysis, infrastructure and facilities requirements
This analysis will define which subsystems and when, will be near saturation. Approaching
that saturation, in order to continue with the traffic growth, the investment must be
performed at that point, previous to congestion.
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For each of the airports of the Nepal Airports Network, it will be made proposals for
improvement and / or extension and / or modernization of the airport infrastructure.
The plan will determine which airports may be financially self-sufficient, and include a
vision of the future development of airports under private sector participation, regional
and community participation. (task 32).
Regarding Tribhuvan International airport, it is important to mention that the investment

plan of this airport (Master Plan) is dependent on any decision to be taken about the
Second International Airport close to Katmandu. The Consultant will include the
investments that the Government of Nepal has to do in these airport infrastructures.
5.2.1.5 Air Navigation
Deliverable 1: Analysis of the current Airspace and CNS/ATM infrastructure
Task 37. Review the structure of the national airspace, the ground support and
telecommunications aids serving the airspace and air transport operators.
Task 38. Determine the current deficiencies with respect to airspace surveillance,
navigation and communications, and the CNS/ATM requirements necessary to meet
Nepal’s airs transport needs in the future.
The efforts associated to these tasks will be focused on the identification of the
weaknesses in the structure of the national airspace and the CNS/ATC facilities
(surveillance, navigation, communications and Automation of the Air Traffic
Management).
In this way, the Consultant will perform two types of studies:
1. Analysis of the structure of the national airspace:

a. Understand the current operation in the Nepalese airspace.
b. Detect and identify the deficiencies, bottlenecks and hot spots.
2. Analysis of the current CNS/ATC infrastructure:
a. Description of the current CNS infrastructure and En-Route and TMA ATC
System.
b. Assessment of the communications, navigation and surveillance
performances in terms of declared coverage and redundancy and analysis
of the current ATC systems performances.
As a previous and essential step required developing these studies, a collection of data
and a preliminary analysis will be carried out. In order to reach this aim, two work phases
mentioned hereafter have been identified and adapted to the Nepal project:
a) A preliminary analysis of documentation:

 The aeronautical information publication of Nepal: National regulations and
requirement, general rules and procedures, air traffic services, ATS routes, SIDs
and STARs charts, airspace classification, navigation radio aids and warnings,
etc.
 Specific information about each ATC sector (En-route or TMA): Vertical and
lateral dimension, air traffic services supported, military and restricted areas,
____________________________________________________________________________________________________
flows of traffic, aircraft performances, as well as relation with aerodromes in its
vicinity, etc.
 Letters or agreement. It will be evaluated the inter-centre and inter-unit
coordination agreements.
 Air traffic data. A painstaking description of the air traffic and its performances
in Kathmandu FIR and TMA will be carried out. In order to obtain a
representative picture that allows a meaningful, realistic and relevant
operational analysis, several air traffic data must be provided. Ideally, this
recorded data must be made during a predetermined representative time
span (seven days) in the high and low density travel seasons.
 Brands, models and main features of the CNS/ATC facilities for En Route and
TMA.
 External and internal development strategy both for ATM and CNS/ATC
systems, if exist, it also will be taken into account in this preliminary analysis.
b) On site Gathering information-Collect Data:

 Interviews with stakeholders: Air Traffic Controllers (en route & approach,
trainers), Airline Operators, Military User, Airport Authority, ATM Operations
Manager, Airspace Planners, Procedure Designer, Technical & Engineering
Staff, etc.
 Data collection “in situ” in OPS room in ACC and approach control offices.
 Technical visit to the ACC and the Equipment Room, to identify the features of
the existing CNS/ATC infrastructure.
During the visit to Air Navigation Centre and approach control offices, the specialized
personal will verify any information described on the first phase.
Analysis of the structure of the national airspace:

The information obtained during the previous phases will be used to define the Reference
Scenario. In this line, during the interviews the Consultant will obtain the current
operational data as well as the premises to define the new Nepalese Airspace concept.
These operational premises are defined regarding the following fields:
 Definition of the future operational requirement. Airspace changes are

triggered by operational requirements. In order to tackle the mentioned ones,
an Airspace Concept will be developed and validated.
 Selection of Performance Criteria. In deciding the project’s objectives and
scope, it is necessary to know how a project’s success can be measured and
validated.
 To agree the ATM/CNS assumptions. What is already ‘available’ has been
identified, but now it is needed to know, what the status quo will be when the
Airspace Concept is implemented.
Once the current operation has been observed, researched, modeled and agreed, an
Analysis of the weaknesses of the airspace structure will be carried out. This analysis will be
performed for each single element (airways network, En-route sectors, TMA) as well as a
global analysis of Kathmandu FIR.
The gained knowledge during this exercise will be the base of next deliverables. In
addition, this deliverable is essential to next tasks due to it will be the reference of the
targeted Airspace Concept. Thus, it could prove useful to compare the performances of
the existing versus the new one.
____________________________________________________________________________________________________
Note that the analysis of the operation in aerodromes and vicinity FIR will be out of the
scope as well as the verification of any charts or flight procedures in accordance with the
standard rules.
Analysis of the current CNS/ATC infrastructure:

The objective of this Analysis is to elaborate a detailed description of the existing CNS/ATC
infrastructure in Nepal both for En-Route and Terminal facilities, attending to the
information obtained in the previous phases. The description will be performed in the
following domains:
 Communications
o Air-Ground Communications infrastructure
o Data and Voice Communications links and systems
 Navigation
 Surveillance
 ATC Systems
Once described the existing infrastructure, an analysis of its performances will be done. This
analysis will be mainly focused on the capability that the infrastructure has as enabler for
the provision of the air navigation and ATS services in the Nepal En-route and Terminal
airspace.
The analysis will consider the following items:
 Qualitative evaluation of the DOC (Declared Operational Coverage) of each
CNS system to estimate (In order to provide an accurate assessment of the
performances of the existing CNS systems it would be preferable to perform
Line-of-Sight Coverage Studies at main flight levels (identified by the Nepalese
Authority), based on a digital terrain heights database (preferably provided by
the Nepalese Aviation Authority, format DTED 1):
o Analysis of the compliance degree at En-route and main TMAs.

o Detection of coverage holes and proposed mitigations.
 Redundancy. Means of increasing continuity and availability.

 Qualitative estimation of the performances offered by ground navigation
systems for PBN.
 ATC Systems high level functionalities and ability to support the current airspace
operations.
This analysis will not include an assessment of the technical performances currently offered
by the CNS/ATC infrastructure, as well as Line-of-Sight coverage studies.
Deliverable Name: “Analysis of the current Airspace and CNS/ATM infrastructure"
This activity will start on May 2012, the mission to collect data is planned in June 2012 and
the document will be delivered at the middle of July 2012.
Deliverable 2: Assessment and redesign of Nepalese Airspace Structure at short-medium-

long term"
Task 39. Assess the requirement for additional air routes though and connecting into the
airspace of Nepal, and determinate the CNS/ATM requirements to serve such additional
air routes;
Task 40. Review the long-term upgrading requirements for managing and operating the
national airspace.
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The main objective of this task is to assess the requirement for additional air routes, ATC
Sectors, TMAs that will allow managing the expected traffic growth in short, medium and
long term.
To achieve this aim, two processes have been identified:
 Assessment of the current situation (short term)
Derived of the analysis of the weaknesses in the current structure airspace, improvements
and recommendations will be suggested and explained on each single element as well as
a global analysis of Kathmandu FIR. This final Short-Term Assessment will include suggestions
regarding the followings keys:
o Recommendations of modifications of procedures (SID`s and/or STAR).
o Variations on the limits either vertical or lateral: ATC sectors, TMAs and/or
CTRs.
o Suggestion to increase the number of ATC sectors.
o Flows reorientation and modifications of the current airways network.
o Proposal of new ATS route following the PANS-OPS ICAO specifications and
the PBN concepts.
o Redistribution of functions among involved ATS units.
o Each proposal will be analyzed and evaluated taking into account the
following aspect:
o Feasibility in accordance with current ATM/CNS infrastructure.
o Maintain or increasing safety levels and efficiency.
This assessment will include a propose of new airways network description, defining the
achieved solutions to the current weaknesses, following the PANS-OPS ICAO specifications
and the PBN concepts but not for their publication or their use for flying.
 Assessment of the future situation (medium and long term)
The methodology to be applied by the Consultant in Nepal is based on the PBN

implementation plan defined by ICAO. It is an iterative process that guarantees a new
airspace concept/design in compliant with beginning of ATM/CNS assumptions agreed
among stakeholders involved as well as performance criteria to be obtained. Next figure
represents a diagram of this methodology:
STEP 1
OPERATIONAL PERFORMAN ATM/CNS

REQUIREMENT
CE CRITERIA ASSUMPTIONS
S
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STEP 2

REFERENCE
SCENARIO

PERFORMANCE
CRITERIA INITIAL
CNS/ATM
ASSUMPTIONS
Airspace
Design

NEW
ATS ROUTES &
TRAFFIC
SECTORS
FORECAST
STEP 3
NEW CNS/ATM
AIRSPACE REQUIREMENT
CONCEPT
The main keys of this methodology are described hereafter:
STEP 1: Definition of initial ATM/CNS premises
Airspace changes are triggered by operational requirements. Therefore, before to define

new requirements for airspace, the operational requirements must be defined. This
definition must be at least in high managerial level regarding with capacity, efficiency,
environment and accessibility of target airspace.
In addition, the future Airspace Concept to be designed is based upon certain ATM/CNS
assumptions. Assumptions must cover a wide field and need to take account of the
expected environment applicable for the time when the new airspace operation is
intended to be implemented (e.g. in 20XX). Assumptions include, for example: the
predominant runway in use within a particular TMA; the percentage of the operations
which take place during LVP; the location of the main traffic flows; the ATS Surveillance
and Communication to be used in 20XX. Are there any specific ATC System assumptions
that should be considered?
In order to tackle the operational requirements in accordance with the CNS/ATM

assumptions an Airspace Concept/Design will need to be developed and validated.
Such an Airspace Concept, addressing all of the requirements, cannot be developed by a
single individual working in isolation. Airspace Concepts, from inception to
implementation, are the product of an integrated team of people working together: the
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Airspace Design Team (Air Traffic Controllers, Airline Operators, Military User, Airport
Authority and ATM Operation).
At the same time, this airspace design team also must select the performance criteria to
validate the new Airspace in order to know how a project’s success can be measured.
This task has been planned and re-adapted in accordance with the schedule and actions
defined in the previous task.
Step 2: Airspace Design
The main objective of this phase is to recommend and design at high level a new airspace
design in accordance with the reference scenario and ATM/CNS premises. The new
airspace design must guarantee that the expected traffic can be handled and working
on established performance criteria. In this way, either new ATS routes or the ATC
sectorization must be coherent to obtain the target objective.
Apart of the initial ATM/CNS premises, the key of this step is the forecast air traffic. It is
needed to know the evolution of traffic at medium and long term (10 and 20 years). In this
way, according with the foreseen air traffic, the current and future Fleet Capability and
flow distribution, the Consultant can model the future status of airspace in NEPAL. This
process requires some phases:
 Selection of representative traffic samples.

 Adaptation of the traffic sample to the forecasts. This process will be based on
a traffic modelization: current and future fleet capability, redistribution of flows.
Once the foreseen traffic and its performances are modeled, the airspace team will
develop several proposals of design to solve the detected weaknesses.
In order to validate the final design, it must guarantee that all performances criteria have
been reached. the Consultant will select the optimum process to obtain ones depending
on these initial criteria: Fast time simulation, statistical analysis, operative analysis, etc.
When the new airspace concept is validated, the design will include the following fields:
 Description and definition of the achieved solutions to the current and future
weaknesses.
 Proposals of a conceptual design based on new airways network following the
PANS-OPS ICAO specifications and the PBN concepts. A detailed scheme of
new airways will be included, not for publication purpose or for their use for
flying.
To complete the airspace design, it is required to prepare an optimized concept of

operations. In this line, the efforts will be focused on the description at a very high level
the operation with the new system performed with the technical requirement expressed
above and with a new airways network, and new sector validated.
The description of the new Airspace concept will be performed, if required, in the following
domains: En-Route and Terminal facilities, Communication Service, Surveillance Service,
ATM System, Flexible Use of Airspace Concept and required new technologies.
In other words, the implementation of the new Airspace Concept will be linked to the
achievable capabilities of the CNS/ATC infrastructure. The definition of the Airspace
Concept will include the determination of the CNS/ATC requirements to serve the
additional air routes. The aim of this task will be maximizing the airspace structure capacity
and efficiency, optimizing at the same time the CNS/ATC infrastructure (Communication,
____________________________________________________________________________________________________
Navigation, Surveillance and ATC systems), in accordance to the implementation of
Performance Based Navigation (PBN). This optimization will include the following items:
 Reviewing the possible introduction of new technologies for CNS-ATC, such as

replacing traditional equipment with satellite based approaches (GNSS) and
transitioning to ADS-B, in accordance to international programs which are
being developed to determine the next generation technologies such as
NEXTGEN and SESAR.
 Proposing the improvements needed in the Nepalese CNS/ATC infrastructure
(Communication, Navigation and Surveillance systems, and ATC systems
functionalities) to serve the new Airspace Concept.
Note that the analysis of the operation in aerodromes and vicinity FIR, as well as designing
charts for publication purpose or for flight, are beyond the scope of this study.
Deliverable Name: “Assessment and redesign of Nepalese Airspace Structure at short-

medium-long term"
This activity will start on July 2012 and the document will be delivered at the end of
September 2012.
Deliverable 3: “20-year National Airspace Modernization Plan"
Task 41. Define a 20-year National Airspace Plan to faction as the basis for all future
upgrading of the airspace and its operation within the planning period. Determinate the
overall cost to upgrade and develop the national airspace, and the required phasing of
improvements.
The purpose of this task is to define a “20-year Modernization Plan” which will include the
new CNS/ATC infrastructure (communications, navigation, surveillance and Automation
for ATC) to be deployed in Nepal to cope with the expected traffic flow as well as the new
airways network and concept of operations defined previously.
This assessment takes into account all inputs coming from previous tasks (Current CNS/ATM
Infrastructure, Short term action plan, proposed of new ATS routes, Operational Concept
and New CNS/ATC technologies to Nepal) considering also that the proposed solution
must be as economical as possible.
The proposed technologies included in the Modernization Plan have been scheduled in
three time periods: short (2015), medium (2020) and long term (2030+).
As a conclusion of the assessment for the modernization and integration of ATC

infrastructure this “Recommended CNS/ATC Modernization Plan for Nepal” addresses the
dates and investment costs of the detailed actions that must be taken, in terms of
communications, navigation and surveillance issues to provide the adequate
infrastructure to manage the future Airspace and ATM concept of operation, in Nepal.
Additionally a high level description of the functionalities required for the ATC systems in
order to cope with the expected demand.
Note that for existing CNS/ATM systems renewal will not be considered in this exercise and
the cost will depend on the prices provided by Nepal.
Deliverable Name: “20-Year National Airspace Plan"

This activity will start on October 2012 and the document will be delivered at the
beginning of November 2012.
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5.2.2 Corporate Business Planning
PHASE I PHASE II PHASE III
ECONOMIC‐FINANCIAL
Operating Cost for Operating Cost
infrastructure maintenance of the CAAN &
Airport and
Review staffing Air Navigation
Proposed of Propose staff salary levels System Operators
CAAN & Operators
ORGANISATION AND HUMAN RESOURCE
PRICING STRATEGY Cash Flow
Review the
current rates
Propose revised scheme Financial Capital
of rates and charges analysis
and charges Programme
Review Opportunities Commercial Profit & Lost

commercial for additional Development
revenues revenues Programme
COMMERCIAL PLAN
Aeronautical &
MARKET ANALYSIS Non Aeronautical
Revenues
Business Plans are to be developed separately for CAAN and Airports & Air Navigation
Services Authorities.
A Corporate Business Plan is a formal statement of a set of business goals, the reasons why
they are believed attainable, and the plan for reaching those goals.
The contents of this Plan are linked to activities all around the assignment as it is explained
in the chart below:
The structure of plan will be as follows:
Executive Summary
The executive summary is designed to pique the interest of decision makers. It should
contain a brief overview of the most important aspects of the business plan. In particular, it
should highlight the product or service, the value to the customer, the relevant markets,
management expertise, financing requirements, and possible return on investment.
Entity description
A general chapter explaining: Type of Activity/Business, Legal Organization, Business

Location, the owners and management of the business.
Market analysis
____________________________________________________________________________________________________
The carry out of a market analysis is the fundamental part of a good business plan. The
obtained information through this analysis will allow us to know the viability technical,
economic and financial of the project.
In the first place, it will be necessary to determine the air traffic growth. For that, the
Consultant will review the air traffic forecast developed as part of the Component 2A.
(task 43)
Next, the Consultant will use this air traffic forecast as the basis for revenue to air traffic
activity over the 5 year period of the Corporate Business Plan.
Commercial Plan. Products and services.
the Consultant is to develop a portfolio of Products and Services, including the review of
existing and potential new items in the future.
the Consultant then reviews the existing level of commercial revenues collected by CAAN
for all commercial sources, in order to identify gaps and opportunities for additional
revenue generation. (task 45)
the Consultant finally develops a commercial development program for the two
Authorities to cover the initial 5 years of operation of these authorities form the anticipated
start-up date. The commercial development plan will assume that all asset transfer would
be completed by the start-up date and that there are no impediments to development of
airport or other lands to be under the ownership of the authorities. (task 45)
Management Organisation and Human Resources
This part of the Business Plan shall include a description of the roles of staff (all staff
positions) in the two Entities, a detailed description of the board position. Also it is
necessary to reflect the employment status, salary, benefits and position grading system to
be applied.
All this is included in Component 3 (Restructuring Plan). Therefore, in the first place, the
Consultant reviews the proposed initial staffing of CAAN and the Airport and Air
Navigation Operators, based on its proposed start-up condition (Task 42).
Implementation schedule
This task will show most major milestones and the most important interdependent events.
 Gantt implementation schedule.
 Major milestones.
 Main task connections and interdependencies.
Economic - Financial Planning. Pricing Strategic
The financial plan is other of the basic elements included in a business plan. The purpose is
to evaluate the economic potential and to present financing viable alternatives.
As central part of the business plan, it will be necessary to prepare the following economic
- financial information for the 5-year period of the Corporate Business Plan:
____________________________________________________________________________________________________
 Profit & Loss Statement: all revenues and costs will be summarized in a Profit and
Loss statement, including Earnings Before Interest, Tax, Depreciation and
Amortization (EBITDA). (task 47)
 The figures will be adjusted for depreciation, financing expenses and income
tax.
 Cash Flow Statement. (task 47)
 Operating costs. These costs will be determined based on proposed staff salary
levels to be developed as part of the Restructuring Component, and allowing
for other operating costs for infrastructure maintenance. (task 46)
 Aeronautical and Non-Aeronautical Revenues. The aeronautical revenues will
be estimated from the air traffic forecast to be prepared as part of Component
2A.
This part will include a revised scheme of rates and charges (task 44). This task shall be
carried out in conjunction with the financial analysis to generate financial statements for
the two organizations.
To carry out this task, in the first place, the Consultant reviews the rates and charges
presently in effect, in order to determine the changes required to ensure that Nepal is
consistent with current civil aviation practice.
This process is iterative with the financial analysis, and these feedbacks the scheme of
rates and charges. The Consultant will explain to the board of CAAN the revised scheme
of rates and charges for approval.
Finally, the Consultant prepares a Capital Programme for the 5 year period of the
Corporate Business Plan. Additionally, it will be identified sources of financing of capital
items contained in the Capital Programme. (task 48)
Web Plan.
The Consultant´s proposal include a strategy for the websites (not the development). In this
task will be defined what and how must be included in the websites.
5.2.3 Private Sector
Review of Opportunities
Previous Private Sector Facilities and activities Benchmark of Private

Review legislation suitable to Private Sector Participation
Participation in Nepal
Sector Participation models
Focus on Tribhuvan International Airport
Analysis of previous Type of Advise on risk to

Cost of Financial Analysis Timing private
assignment in New participation Government of Nepal
developing and participation
Terminal model MOTCA/CAAN
Potential revenues
The purpose of this part of the component is to enhance and expand the participation of
the private sector, especially in the Airport and Air Navigation Operation (including airport
____________________________________________________________________________________________________
facilities/support services, Terminal Building and Air Cargo Building), and develop a plan
for outsourcing those activities deemed to be appropriate for initial application of
outsourcing.
In the SWOT analysis we have done before; we have identified private sector opportunities
due to the new Authorities organization. (task 49)
In order to define this planning it is necessary to carry out the following tasks:
Review legislation
In the first place, the Consultant will analyze the laws regulating air transport in Nepal, in
order to understand the existing rules and to check whether it facilitates or enables a
smooth and plausible development of air transport. Among others, the Act on Private
Financing in Build and Operation of Infrastructures will be reviewed and analyzed to
determine the legal requirements and suitability of the proposed development plan,
including a tentative pre financial feasibility.
The Consultant will provide its extensive experience in policy analysis and airport
privatization in the Sub Andean Region (Venezuela, Costa Rica, Colombia, Ecuador, Peru
& Bolivia).
Previous Private Sector Participation in Nepal
Understand the advantages and disadvantages of private sector participation in the

development plan through previous experience of private sector participation in the
development of Nepal infrastructure.
Facilities and activities suitable to Private Sector Participation
The Consultant identifies facilities/support services and activities with private sector
participation potential.
In particular the Consultant will analyze the TIA terminal concessions and the air cargo
building, looking for private sector participation (task 50)
We also analyze different services to be outsourced (task 50):

 Airport Maintenance Services at TIA
 Civil Engineer Services of CAAN
 CAD draughting Services
 Project Management Services
The Consultant will indicate the benefits and losses of these actions. In some cases the
problems involved are bigger than the economic benefits.
Benchmark of Private Sector Participation models
Understand the different Private Sector Participation models available in the region, and
their applicability within CAAN and Airport and Air Navigation Service Providers. (task 49)
New International Terminal Building at TIA
____________________________________________________________________________________________________
The Consultant will carry out a technical and financial review of the proposed new
International Terminal Building for the purpose of determining its suitability for private sector
investment.
Analysis of all previous assignment with regards to new International Terminal Building at
TIA under considerations, this include airport location, inventory, planning, investment
plans, traffic forecast (potential), traffic type (tourism, business), current capacity, future
demand, SWOT analysis and infrastructure requirements.
Determine the costs of developing the proposed Terminal. the Consultant will develop a
study with our estimation of the project costs for short, medium and long term.
The Consultant is to perform a feasibility study of the new Terminal Building in TIA, including
its potential sources of revenues (aeronautical and non-aeronautical). We will create a
financial analysis model for the new Terminal. The model will be structured on the following
parts: Returns, cash-flow, passenger forecast, debt, phasing, capital, amortization, Org
bud, Org DF, Org profit&loss, Org with P&L
We will also identify different possibilities of management contracts to Concession

agreements (Build Operate Transfer and its derivatives), Private Public Partnerships, Private
Sector Ownership (more than 50% equity). Timing for the private sector participation based
on requirements and capacity/demand constrains.
the Consultant consider different scenarios for private sector participation, including one
model might be the concession to 20 or 30 years of managing the International Terminal to
companies or consortia responsible for the operation and management of facilities, as
well as investment in infrastructure.
Concession agreements might fund the modernization process, yet theirs should be
regulated in a way as to maintain the efficiency of the airport and to counter potential
abuse in the setting of fees and charges to the public.
Other models would be private investment to boost economic growth in the local
economy to be developed by: Local Businesses, International business, Airlines, Tour
Operators, Privatization of services, Air Cargo, Maintenance and Handling.
Private Airports or Airports under Private Operation
Now, the most important Airport Project in Nepal, the Second International Airport can be
an opportunity for this type of Private Operation.
The Consultant will help CAAN at any subject included in this project in order to take the
best decision in this area for Nepal.
5.2.4 Non-Aeronautical Revenues
Current Situation
The Consultant identifies the current non-aeronautical revenue generating activities,

collecting the following data for all of them:
 Competitiveness model
____________________________________________________________________________________________________
 Activities
 Surfaces
 Location
 Key indicators (income/m2, sales/m2, sales/passenger, etc.)
 Rental Rates
 Concession periods
With all these information, the Consultant will obtain and structure the activities that
conform the non-aeronautical revenues at the current situation and will identify
preliminary requirements to increase the non-aeronautical revenues.
Commercial Layout
The Consultant defines the new commercial layout for TIA, and will develop some ideas for
smaller airports.
The layout includes the areas inside the airport terminal dedicated to the non-
aeronautical businesses, specially indicating the retailing areas and the catering areas.
New Businesses
The Consultant will analyze new activities and new businesses in Nepal, according to
improve the non aeronautical revenues.
the Consultant will take in account not only businesses inside the Terminal buildings, like
retailing and catering, but also, any other type of business at any part of the airport
infrastructures, like hotels, hangars, FBO, car parking areas, maintenance, cargo and
logistic centers, etc.
____________________________________________________________________________________________________
5.3 Restructuring
As a result of the meetings held during these weeks of working the initial formulation of the
work program has been revised in order to fit the new organization that will be proposed
to the real needs of the current CAAN and the future actions to be taken in the country, as
would be the construction of the second international airport in Katmandu.
New Organizational Remuneration
Current Situation Transition Plan
Structures scheme
List of Activities Salary Schedule

CAAN Organization
Procedures
Human Resources Benefits Testing
Airport and Air Tracking Process
Navigation System Communications
New Organizations Pensions Documentation
Operators
to be developed
Decision
First of all we´ll have to define how many organizations will be in the future. It´s clear the
separation between the Regulatory Entity and the Services Providers Entity. But, as we
have told before, after the meetings it would be possible to split the Operational Entity into
two parts, one of them would be in charge of the airports operation and the other one
would be in charge of the Air Navigation Services.
In order to it, the Consultant is to analyze the current structure and organization of CAAN,
identifying clearly the activities, the human resources, economic conditions, buildings, etc.
As a methodological approach the Consultant believes it´s better to take into account
three organizations than two, because of, if, in the end, it´s decided to have only two, it´ll
be easier to join activities, and the rest of the issues than to do a three-way split, again.
the Consultant separates the different activities in three different lists, the first list will include
all the activities close to regulations, laws, international agreements, licenses, certificates,
etc and will be part of the future CAAN organization, the second list will include the
activities related to the operation of the airports and the third list will include the activities
related to air navigation system in Nepal.
 CAAN (Civil Aviation Authority in Nepal) will be responsible for regulation in Civil
Aviation.
 NAA (Nepal Airports Authority) will be responsible for the service provision of the
airport operations in all the Nepalese Public Airports.
 ANSA (Air Navigation Services Authority) will be responsible for the service
provision for air traffic services and air navigation services throughout Nepal.
In case the final decision were to set up only two organizations, the only thing to do would
be to unite NAA and ANSA to create the original NAANSA.
To resolve which the best option is the Consultant will apply the following steps:
____________________________________________________________________________________________________
 brief benchmarking report in developing countries regarding aviation models
 portfolio of activities developed by CAAN
 lack of activities that would be detected in the preceding analysis
 needs of material and human resources for each activity.
 Activities to develop by each entity
 Pros and Cons Analysis of the different options
After these, CAAN will decide and take the decision regarding the organization options,
and the rest of the task will be done taking account three or two entities, depending on
the choice.
According to the Human Resources, the Consultant analyses the existing situation by
studying the current chart and job descriptions, prior to the restructuring, as well as the
workforce available and the new proposed organization structure (including a small
strategic review to align the new chart with the strategic objectives of the organization).
This is supplemented by interviews with managers of the various organization units
proposed in the new structure. This analysis offers an insight into the management model
even before the restructuring process has taken place, and also provides key information
about the resources available and the particularities of each of the new business units.
At this point, the Consultant will know perfectly the current organization and will prepare a
plan to define the Start-up date for the new organizations. This date will be determined in
conjunction with CAAN management and MOTCA. (task 54)
New Organizational Structures
Nepal Government has developed the new staff requirements in the document TA 7031-
NEP and a restructuring component in the Capacity Building Programme.
The Consultant will analyse the organizational structures already proposed for CAAN and
NAANSA (task 70) and will adapt this structures, if it were necessary, to the split of NAANSA
into NAA and ANSA and will develop these organizational structures through the lowest
level, indicating the staff and position grading at every organization. (tasks 55, 56 & 59) the
Consultant will define not only the lowest organization, but also the highest positions. (task
53)
Based on this analysis, first “role models” are identified for each organization unit, as well as
the other major rating factors based on which we can determine the different levels of
responsibility, for each position in terms of its contribution to organization. Each position
identified will be level off according to this scale, which will be the structure of posts and
levels of the organization.
Once the new roles are identified and standardized, we will proceed to develop a
manual of functions that contain the description and the same requirements (mission,
responsibilities, profile, hard, soft profile, etc.). (task 64)
the Consultant is to inform the existing staff of CAAN about the new organizations and their
possibilities for the future, giving them the opportunity to choose in which organization the
want to be in the future, in CAAN or the new NAA or ANSA, or maybe NAANSA, if we don´t
split. (task 64)
At this point the Consultant identifies the new positions for the existing staff of CAAN in the
new organizations in relation with their qualifications and experience.(task 60)
____________________________________________________________________________________________________
The next step is to determine how many positions we need to cover with new staff, and
which type of them. The Consultant defines the experience and qualifications needed to
fill those positions and will prepare the recruitment of new staff for the two or three
Authorities in accordance with Personal Department of CAAN and TIA (task 77). The
Consultant will help to put into effect the recruitment plan according with the transition
plan that will be developed for this project. (task 59)
The Consultant will define an Accommodation Plan, defining which type of offices will be
needed for the new organizations, and will accord with the CAAN and MOTCA managers
the new locations in the city, TIA airport or any other considered position. One option is
planning CAAN staff at the actual CAAN HQ and NAA and ANSA or NAANSA staff at TIA.
(task 62)
The Consultant will plan de office accommodation for the restructured organizations,
define the equipments and furniture needs for the restructures organizations.
Remuneration scheme and benefits package (task 53)
The Consultant will define a complete remuneration scheme for each organization and
will define benefit packages if it’s possible, with this methodology:
 Data collection. Study of current pay levels (analysis of internal equity). This
study includes the entire compensation package (salary and benefits)
 Determining the optimum salary structure. Based on the results of the analysis,
development of the new salary structure (including benefits package)
appropriate to the new organization chart. (task 57)
 Implementation of the new salary structure in the current staff organization.
 Wage Policy analysis. Analysis of the levels of compensation and market
benefits (external competitive analysis) and determination of company’s policy
in each of the levels and positions of the organization (under market, market or
market level). (task 58)
 Recommendations for salary management. Provide recommendations for
keeping the wage structure efficiently organized.
 Pensions. Define provisions to be applicable for staff pensions in every
organization. (task 61)
All this data will be included at the NAA, ANSA or NAANSA and new CAAN Business Plans,
including a short-term interim financing that will cover the cash flow requirements for the
start-up of both organizations. (task 63)
Restructuring, Implementing and Transition Plan
The Consultant will develop an implementation plan for restructuring the existing CAAN
into the two/three new organizations. We have already defined the new structures and
now we need an implementing and transition Plan.
The Transition Plan must develop all necessary actions to put into action the two new
Authorities:
 in time
 with all resources required
 optimizing economic results from the beginning
In this Transition Plan, the Consultant will include: (task 65)
____________________________________________________________________________________________________
 Schedule. According with the start-up date, the Consultant will define the
critical actions to be carried out leading up to the implementation date (new
organizations, new laws, training program, business plans, financing, offices,
staff recruitment, etc.) (task 53)
 Organization. The Consultant will define responsible staff to get all that critical
actions. The Consultant will define a coordinating structure and will use
management tools. The different organizations involved, require high degree of
coordination. The overall operational readiness process must be coordinated
through a flexible working structure of Committees, Commissions and Working-
Groups
 Procedures. The Consultant will define new procedures needed for the new
organizations.
 Testing Period. The Consultant will prepare tests before the start-up process of
the new organizations, including IT systems and new staff trained skills.
 Tracking process. The Consultant will detect any possible delay and will
communicate with the CAAN management and the Board of the project. (task
66)
 Communications. The Consultant will maintain briefings continuously with all the
authorities involved in this project to coordinate and take all the
decisions/approvals required on issues of significance. (task 67 & 68)
 Documentation. The Consultant will document the Plan, and will maintain and
control all the documentation developed from the beginning until the end of
the project. (task 69)
The Consultant will define clearly what everybody’s functions at the moment of the
change. In some cases only a few changes will be noticed, but in others, some
departments will have a completely new job.
____________________________________________________________________________________________________
5.4 Human Resources Training Plan
This component gives us one of the more critical point all over the Transition Plan and will
defined in a Staff Training Program, useful, not only for the transition period, but also for the
future.
Current Training Program Staff Training Program Staff Training Program

Analysis Development Implementation
Training Program Instructors Selection
Methodology
Means of Delivery
Staff selection for training
Annual Budget Training
Content
Short‐Term Training
Courses Development
Current training program Analysis
the Consultant is to analyze the current training plan of CAAN and TIA (in collaboration
with the Civil Aviation Academy) and provide, to accommodate them in methodology
and duration of content, the real requirements of the new Authorities, proposing the
development of career plans and training itineraries. The Consultant will establish the
specific technical training needs of every area of the new Organizations and the training
activities required to optimize every position. (task 71)
The Consultant also identifies the critical staff training requirements for the new Authorities
CAAN, and the Operators and it will be a part of the Transition Plan.
Staff Training Program Development
The Consultant is to develop the “Staff Training Program” Document for the two/three
Authorities, CAAN and Airports and Air Navigation Service providers. It includes the
definition of the learning objectives, designing and developing generic training routes.
Also includes the development of brochures on training programs for later delivery to
employees. (task 78)
a) Develop of a Training Program (task 72)
The Consultant is to develop a Training Program, separating the training procedure in two
different parts:
 Training required to staff to bring the Authorities up to full strength.
 Advance training to further develop the capabilities of staff
The Consultant will define a list of courses to be included in every part and for every staff
position, but not only for the transition period but also for the future.
The Consultant will define the content of the courses and an estimated time to be
imparted.
____________________________________________________________________________________________________
b) Means of Delivery (task 73)
Once we have developed the list of courses needed for every staff position in both
Authorities, we will identify the means of delivery of the entire proposed training program:
 E-learning courses
 Classroom courses
 Training by international experts in Nepal
 Training delivered overseas
c) Annual Budget Training
The Consultant also performs annual budget planning and training activities forecasted
and distribute the number of training hours available in the year among the existing areas.
This planning will have two different parts; the first one will developed the transition period
and the second part, the training activities per position, in the future, with the two new
Authorities in normal operation.
d) Courses development (tasks 74 & 79)
The Consultant will develop the courses needed to be delivered locally in Kathmandu
through e-learning and classroom delivery.
Staff Training Program Implementation
Once you know the requirements of the Company, by analyzing the current training plan,
the methodology will be assessed on whether it delivers the required training. As factor
that will be taking into account, we will consider cost savings, if any, geographic
dispersion, etc.
a) Instructors Selection (task 75)
The Consultant is to identify international and local instructors between the equipment
involved in the project or between all the specialists belonging to the company (more
than 3.000 staff belongs to the Consultant nowadays) and will send them in a short-term to
deliver in Kathmandu the critically-required courses of instruction defined in the Plan.
The Consultant shall also assist the HR staff to identify internal trainers. It aims to promote
internal training as a tool, to help improve the competitiveness of professionals within the
company. Combining this methodology with the Needs Assessment will enable us to
identify talent among the staff. Those identified employees will be therefore trained in
various specific activities, such as:
 Talent training.
 Highlight and occasional trainer.
 Trainer e-learning
b) Staff Selection for initial training (task 76)
The Consultant shall support the HR/ Personnel Department to identify initial candidate
staff for training, indicating which courses they must receive and when they have to do
them. These staff may be existing staff or new staff proceeding of the recruitment process
developed for both organizations.
c) Short-Term Training
The Consultant selected instructors and local instructors will impart the courses according
with the Transition Plan and the Staff Training Program.
____________________________________________________________________________________________________
5.5 Computerization
Service Support & Tools
Design Monitoring
Consulting Network Documentation
security implementation Certification
roles design systems
policies and training
The main objective of the process is to establish the systems & network requirements arising
as a result of the restructuring of both organizations.
Having the existing structure defined in the previous phases in mind, and taking into
account the tasks & duties of each division and department once the process has been
concluded, with the review of the office accommodations for the CAAN departments
and Operators departments, we will define an information system that will include the
requirements identified and also it is structured in a way that could easily be expanded
and with the lowest maintenance cost possible. (tasks 80 & 81)
In order to carry out the task, the Consultant proposed a work methodology based in ITIL
(Information Technology Infrastructure Library), a standard designed for management of
Information Technology Services, that has been successfully implemented in many
organizations and it is considered as industry best practice.
Among the main objectives of the ITIL we can highlight:
 Improve the processes and management of IT services in each unit

 Facilitate the change towards the “Process Management” in the less
developed areas
 Change from an IT focus to a business focus using business indicators.
Service Support
This services aim at ensuring that users have access to those information systems enabling
them to perform efficiently their business functions.
This requires defining the role of Customer Care Centre making sure is able to pick up the
incident, identify the problems associated and provide to the solution.
Also it will be considered the need to establish a Department of Information Systems which
will be responsible for Configuration Management, Change Management and Production
Management.
Support Tools
It will be required the use of support tools that allow a full service management. The tools
selected must be able to ensure compatibility with the following ITIL processes:
 Incident Management
 Problem & Event Management
 Request & Change Management
____________________________________________________________________________________________________
 Asset Management and Configuration Services
 Knowledge Management
 Service Level Management
 Financial Management
 Availability Management
 Release Management and Deployment
Tasks to be completed for implementation:
 Consulting roles (task 82) : We will analyze the needs for information systems
related to the functions to be performed by each of the teams work defined in
the structure of each of the newly created organizations.
 Network Design (task 83): We will design the communications system suitable for
each of the organizations in order to allow then to work together, with the
ability to be independent although interconnected.
 Design security policies (task 88): We will establish the appropriate security
policies for access to computer systems and to protect and ensure
confidentiality of information.
 At this stage, will also identify policies needed to retrieve backup information
that is considered normally something of great interest to organizations.
 Documentation systems (tasks 84, 85 & 86) : We will prepare the documentation
necessary to ensure the implementation of systems and verify their proper
functioning, in order to allow organizations to determine the provider of the
same.
 Monitoring the implementation and training (tasks 87 & 89) : After determining
the needs for Information Technology and documented processes, we will
monitor their operations and systems during the first months.
 We will also be train the professionals responsible for maintaining service in ITIL
standards and the use of ITIL management tools.
 Certification (task 90): Once installed the system and verified its correct
operation we shall certify the proper operation thereof.
____________________________________________________________________________________________________
5.6 MANAGEMENT INFORMATION SYSTEM
5.6.1 MIS
Requirements Management
Replan Replan Replan Replan
Project Planning
What to
monitor Replan
Project Monitoring and Control
Quality and
Measurements noncompliance
and analyses issues
Measurement Quality
and Analysis MIS Assurance
Processes and work
Information products, standards,
needs and procedures
Configuration Controlled
items and configuration items,
change requests baselines and audit
reports
Configuration
Management
Functional Evaluation of Development Integration and

Definition specs
Requirements MIS applications implementation
Requirements Management: (task 92)
The goal is to identify and manage requirements. Thus, the Consultant will be able to
identify inconsistencies between those requirements, plan projects and work items.
It should manage all project requirements, both technical requirements as non-technical

requirements that have to be reviewed jointly between the client and the developer.
Project Planning:
There will be a planning tasks identified based on the requirements listed in the previous
phase. There shall be a calendar that reflects the agreements and commitments made.
This calendar will be reviewed periodically because the requirements may be modified
during the project, affecting the scope and deadlines.
Project Monitoring and Control:
Through follow-up meetings will monitor project status, identify corrective actions if
necessary to offset the initial plan.
Measurement and Analysis: (task 96)

____________________________________________________________________________________________________
It must implement a mechanism to collect data storage and analysis of the same, with the
aim of being used to inform management of the project, and so the decisions taken can
be based on current data.
Quality assurance:
We will develop a quality plan that will identify and assess those aspects which do not
comply with the requirements of the project, in order to solve them.
Configuration Management:
The goal of configuration management is to establish and maintain the integrity of the
work items identifying, monitoring and auditing these elements, such as source code or
functional project documents.
Ineco is certified in CMMI Maturity Level 2 for Development (CMMI-DEV ML2). Basically,
CMMI Organizational Helps Separate Traditionally integrate functions, set process
improvement goals and priorities, provide guidance for quality, and provide a point of
reference for appraising current processes.
In level 2, it covers the following support, project management and engineering areas:
Configuration management, measurement and analysis, project monitoring and control,
project planning, process and product quality assurance, and supplier management
agreement
the Consultant has found value in ITS Measuring progress by Conducting CMMI Appraisals
as a key to Improve and provide better quality STI services to clients as well as enlarging
the customer base of the company due to a CMMI-certified enterprise is Known Widely
Followed the expertise and methodology. Results are also more likely to be guaranteed.
Looking at it in another way, that Means CMMI certification is a tool to assert the company
goodness without proof.
Implement process:
 Functional Requirements (tasks 91,92,93,94 & 95): the Consultant will analyze
the needs for the Management Information System (MIS) related to the
functions to be performed by each of the teams work and define the most
appropriate management systems.
 Technical specifications (tasks 92, 93, 94 & 95): Detailed definition of technical
and detailed specifications shall be used to develop a Management
Information System involving for each organization.
 Evaluation of information systems (task 92): We will assess different commercial
management information systems on the market in order to determine what
may be the most appropriate to meet the needs of each organization. In case
we don’t find any commercial application that meets the functional needs and
/ or economic customer, the Consultant will evaluate the possibility of ad-hoc
development.
 Applications development (tasks 96, 97 & 99): There will be an outlet for those
needs requirements or functions that fall outside the coverage of selected
commercial applications. Based on the requirements the applications will be
developed.
 Integration and implementation (101): the Consultant is to start-up the
Management Information System by integrating with applications, existing
____________________________________________________________________________________________________
or/and developed. We will build configuration and security policies of the
applications for each organization. (task 97).
The Consultant then provides initial data load for functional and technical test
to ensure the proper operation of applications. (tasks 98 & 100) Once
developed and tested, the integrated applications will be run periodically in
the production environment to monitor the correct operation of the MIS. (Tasks
104 & 105)
 Manuals Development and Training (tasks 102 & 103): the Consultant shall
develop several manuals to facilitate adaptation to new systems and training
sessions designed to make a correct knowledge transfer.
5.6.2 Financial Management System
The Consultant is to review the financial information management and reporting

requirements of the Finance Department of the Authorities and assess about the
commercially available accounting software packages. (task 106)
According with the financial officers of both Authorities, the Consultant will select a system
in each case. (task 107) and support the implementation. We will help with the installation
program and will train to the finance department’s staff in each organization. (task 108)
____________________________________________________________________________________________________
6 PROPOSED WORK SCHEDULE
____________________________________________________________________________________________________

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Revision Status & Approval Log

Date Status for Purpose Version Author Reviewer Authoriser

Name Role Signature Date

Notes on Document Control

The different components of this project are:

1. 2. 3. 4. 5. 6. Management

2A. 2B. 2C. Private 2D. Enhancing 6B. Financial

In developing the Capacity Development of CAAN the Terms of Reference highlighted

o The National Air Transport Plan

• To develop the Business Plan of the new organizations

• To enhance and expand the participation of the private sector, especially in

• To enhance the non-aeronautical revenues at the airports.

• To establish the systems & network requirements arising as a result of the

The regulatory framework will be analysed and amended or changed in order to be

1. Involvement of Asian Development Bank. On May 25th 2010 The Government of

• continue assistance in the improvement of TIA and strategic domestic airports,

Reports Description/Technical Accomplishments Timeframe

1. Civil Aviation Act, 2015 (updated up to 2066)

Documents not available (at this moment)

1. Civil Aviation (Investigation of Accident) Rules, 2024

ICAO’s USOAP Audit Report

In subsequent recommendations the Appendix lists a considerable number of regulatory

 Primary aviation legislation and civil aviation regulations

4.2.1 National Plan For Civil Aviation Development

4.2.1.1 Air Traffic Demand

The last Air traffic forecast in Nepal is tabulated below:

 International Aiport. Tribhuvan International Airport in Kathmandu.

There is a new project for a second international Airport at Nijgadh.

Tribhuvan International Airport

Significant progress has been made in the airport recently:

 Overlay of runway and taxiway

 Runway extension by 300 meters towards the south

Gautam Buddha Regional International Airport

4.2.1.4 Air Navigation

Air Traffic System (ATS)

The most important facilities for ATS in Nepal are:

 Area Control Center in Kathmandu.

Communication, Navigation and Surveillance (CNS)

Western Nepal has some coverage problems, because of the geography.

c) Navigation. Some improvements are coming also in this area.

There are some other issues according to the aircraft operation.

 Protection of the ATS/CNS installations

4.2.2 Corporate Business Planning

There is no clear definition about the aeronautical and non-aeronautical revenues.

A committee of Ministry of Commerce and Supplies organized to study prevailing cargo

According to the current accountability system, everything is controlled by hand. They

They must improve Man power skills in this area:

o IT and Computerization skills of the staff involved in finance area.

4.2.3 Private Sector

The different Methods included in the Nepal Legislation are:

4.2.4 Non-Aeronautical Revenues

There is no clear definition about the aeronautical and non-aeronautical revenues.

Currently, CAAN is taking different roles into the air transport:

4.4 Human Resources Training Program

STAFF STRENGHTH IN CAAN

Currently CAAN is close to 200 people under their defined organization.

The Academy is using ICAO Annexes for training material.

Actually, CAAN has no Computerization Plan.

Actually, there is no Management information System in CAAN Headquarters. Mostly

 specific problems to be resolved,

The report would focus on:

The main issues to explore will be: