NAC's aircraft purchase plan in limbo

KATHMANDU, July 20: The Nepal Airlines Corporation´s plan to buy two new aircraft after a hiatus of more than two decades has hit a snag due to problems related to the board of directors, which is yet to get a full shape after the formation of the new government. [break]



NAC had formally initiated the process to purchase the aircraft in April by floating a 45-day tender notice inviting only aircraft manufacturers to participate in the bidding. On June 22, a committee formed to evaluate the bid documents had submitted a comprehensive report to the NAC management on the offers made by the two companies -- Boeing and Airbus -- that had participated in the bidding.



KB Limbu, managing director of NAC, told myrepublica.com that he has already forwarded the report submitted by the committee to the board of directors. "But nothing has transpired as we have not been able to call a proper board meeting," he said.



According to reliable sources, the board has held only one meeting after the appointment of Sharat Singh Bhandari as the new tourism and civil aviation minister. That meeting was held few days ahead of the beginning of the new fiscal year. "But it was an emergency meeting called to approve the budget proposed by the company for the new fiscal year," the source said. "No discussion was made on purchase of new aircraft."



One of the problems with the board, as identified by many sources, is that the board is incomplete.



After the change in the government, three of the board members, who were appointed by the Maoist-led government, have resigned. But, so far, only one of the three vacant positions has been filled.



"In order to smoothen the board´s work, the government either has to fill two vacant positions or say that the board is complete without them," one of the board members of NAC told myrepublica.com on condition of anonymity. "Giving continuity to this status quo will not benefit the company."



NAC´s board consists of seven members, including four politically appointed individuals, two joint secretaries from the finance ministry and civil aviation ministry, and NAC´s managing director. These people are responsible for giving a green signal to majority of the decisions taken by the NAC management.



NAC, which once had 21 airplanes, including four Boeings, is currently trudging with three Twin Otters and two aging Boeing 757s not knowing when these planes will cease to operate. NAC had bought its last Boeing in 1988.

Related story

First accident of ATR-72 aircraft in Nepal