PAC's intervention

Parliament’s Public Accounts Committee (PAC) has finally asked Nepal Airlines Corporation (NAC) to scrap the deal to buy multiple aircraft from European manufacturer, Airbus, for which the corporation has already paid advance money. PAC has rightly pointed out that the NAC management had decided to buy aircraft and made advance payments without following procurement laws of the country and without maintaining transparency in the process. The PAC’s investigation of the case has found that the top management of the NAC had paid the lock-up money even without due authority from the board of directors. At stake now is US$750 thousand paid to the aircraft manufacturer as commitment money to buy the aircraft. Since the money was non-refundable, there is very slim chance, if any, that the NAC will be able to retrieve it.



If the NAC loses the commitment money, who will bear the loss? The ailing state-owned corporation should be in no circumstance made to bear the loss accrued due to sheer negligence of the top management. It’s actually hard to believe how the top management led by Sugat Ratna Kashakar, who has such a long experience in public enterprise management and procurement processes and laws, made such a faulty decision. It actually gives credence to the argument that Kanshakar knowingly flouted the process and law with a malicious intention of raking in money through the purchase. The burden of proof to prove that he and his team are innocent and they didn’t commit anything wrong knowingly should lie with Kanshakar and his team. If they fail to prove their innocence, legal action should be taken to recover the money from them incase Airbus refuses to return the lock-up money. This will serve as a reminder to the future management of the public enterprises that they will be held accountable for their actions.



The PAC has also acknowledged the need to buy new aircraft to rescue the ailing national flag carrier and has asked the government to initiate reforms in the NAC so that it can be run efficiently in the future. Since the NAC will not be able to buy new aircraft without government guarantee, the finance ministry should make sure that the reform is done, and the corporation also carefully prepares its business plan so that buying aircraft will accrue it profits in the future. The ministry, along with the Ministry of Tourism and Civil Aviation, should also make sure that the whole procurement process is done transparently and due processes are followed so that the whole affair doesn’t, once again, turn into yet another scam that the NAC is so prone to.

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