PAC halts NAC's bid to buy widebody aircraft

KATHMANDU, Sept 19: Parliamentarians on Friday made clear that they are against Nepal Airlines Corporation´s bid to purchase widebody aircraft without a business plan to utilize them in profitable manner. The parliament´s Public Accounts Committee (PAC) also directed the ministry concerned and the corporation not to go ahead with the purchase plan for now. [break]



The committee issued eight-point instructions to the Ministry of Tourism and Civil Aviation (MoTCA) and the Nepal Airlines Corporation (NAC), asking them to submit the rationale for purchasing widebody aircraft for the state-owned national flag carrier prior to initiating the procurement procedure.



The committee issued the instructions after it grilled the Minister for Tourism and Civil Aviation Sarat Singh Bhandari, Secretary Nagendra Ghimire, Executive Chairman of NAC Sugat Ratna Kansakar and General Manager KB Limbu on the ongoing process of purchasing the aircraft.



Taking seriously the findings of a recent report by Center for Asia Pacific India (CAPA) -- an international consultant -- the PAC has sought further clarifications on NAC´s business plan for operating the widebody aircraft.



"For now, we have directed MoTCA and NAC management not to go ahead with the procurement of widebody aircraft," said Som Thapa, secretary of the committee.

The PAC, however, gave its nod to the NAC´s plan to purchase narrow body aircraft for operation on Asian routes.



It asked the NAC to purchase aircraft from either Boeing or Airbus, highlighting that purchasing and operating aircraft from different companies could raise technical, manpower and financial burden for small carriers like NAC.



"In this connection, we have also sought justification from MoTCA and NAC why they plan to purchase aircraft from different companies," Thapa said.



The committee also directed NAC to immediately resolve the dispute it has over the jurisdiction of the General Manager and Executive Chairman and strictly follow the bylaws regarding procurement of aircraft.



During the meeting, most of the parliamentarians stressed reform in NAC management and development of proper business plan to operate the new aircraft in profitable manner.



"Given the mismanagement at NAC, how can we expect proper utilization of Rs 10 billion that the Employees´ Provident Fund is providing to NAC to procure the aircraft?" asked lawmaker Prakash Chandra Lohani, who is also the former Finance Minister.



Deep Kumar Upadhyay, another lawmaker and former tourism minister, also demanded improvement in the management of NAC and transparency in the procurement of aircraft to revive the ailing national flag carrier.

Related story

NAC to buy two widebody jets