KATHMANDU, Nov 4: Ministry of Culture, Tourism and Civil Aviation (MoCTCA) has revived the process for the procurement of eight aircraft for the Nepal Airlines Corporation (NAC) following instructions from the Prime Minister´s Office (PMO).
"We have finalized the procurement plan, under which we are eying to buy eight aircraft. But further works will go ahead only after the cabinet´s nod," said Yagya Prasad Gautam, secretary at MoCTCA.
Under the Immediate Governance and Economy Development Action Plan, the Prime Minister had directed MoCTCA to procure eight aircraft, two for international and six for domestic operations for the national flag carrier, and instructed the Ministry of Finance to facilitate the process.
Going by the instruction, Gautam said they were reviving the deal -- which was shelved following controversy and instructions from the then Public Accounts Committee of the parliament about two years ago -- of procuring two aircraft with Airbus.
Likewise, MoCTCA has also decided to revive the proposal of the Chinese government to purchase six Chinese aircraft -- including two 58-seater MA-60 and four 19-seater Harbin Y-12 -- for operating domestic flights.
Under its proposal, officials said China has agreed to provide a MA-60 and aY-12 on grant, if Nepal puchased another MA-60 and three Y-12 on loans. "It has even assured of providing soft loans to Nepal to facilitate the deal," said a source.
That is not all. officials said, "The Chinese side has this time quoted a price much cheaper than what it had proposed early in February, 2012." The Chinese supplier had proposed to supply a MA-60 at US $ 16 million and a Harbin Y-12 at US $ 4.5 million in February. However, officials refused to disclose the prices offered by the supplier this time.
Gautam confirmed the Chinese government has agreed to provide six aircraft under grant and soft loans, but he did not divulge further. Nonetheless, he said MoCTCA was yet to work on the prices.
"The procurement plan we worked out is just an initial draft and does not deal with prices. Only the final plan will cite the total cost," he stated.
Following the decision to revive the Chinese deal, Gautam informed Republica that MoCTCA has already sought the opinion of NAC over procurement aircraft from China.
NAC officials confirmed that they had received the draft plan a week ago and have already sent it back to the ministry with some amendments.
Moreover, NAC sources disclosed that the carrier has already invited officials of Airbus to revive the three-year-old procurement deal. "This time we will be going for two narrow-body aircraft," said the source.
In the past, the NAC board on October 26, 2009 had decided to purchase one narrow body and one wide body aircraft, but the purchase plan was not executed as it landed into controversy following alleged violation of Public Procurement Act.
Although the then Public Accounts Committee of parliament had directed the ministry to terminate the deal, the officials had not complied, fearing possible legal action by the Airbus.
The process to procure the Chinese aircraft too was initiated about a year ago after then Tourism Minister Lokendra Bista Magar signed an MoU with the Chinese manufacturer Avic International. But the deal never materialized as Magar had signed the deal without following due process.
"We are serious about the procurement plan this time around. We will make sure that it will be executed in compliance with the existing laws," Gautam stated.