Nepal government will be paying certain installment of wide body aircraft after Nepal Airlines Corporation (NAC) failed to pay the premium.
The corporation is in financial crisis due to lack in operation in full capacity of newly purchased wide body aircraft.
NAC bought two Airbus 330-200 wide-body aircraft taking loan from Citizen Investment Fund and Employees Provident Fund.
The government will be paying three installment of Citizen Investment Fund and Employees Provident Fund as NAC failed to repay the loans and interest rate repeatedly. The government will be paying installment not as grant but as loan.
According to the information given by the source of Tourism Ministry, the government will be paying three installment through NRs 40 crore 23 lakh in each installment which NAC failed to repay. The Finance ministry also has agreed on this.
According to the source, Madan Kharel, executive chairman of NAC has requested Prime Minister KP Oli to make a favorable environment for paying some installment.
The government has agreed to provide NRs 1 Billion 20 crore for three installments.
NAC had to pay NRs 40 crore 23 lakhs for third installment including loan and interest till December of 2018.
However, the corporation has cleared all installments of Airbus A320-200 narrow body aircraft. NAC paid only NRs 23 crore 9 lakhs in previous installment of Employees Provident Fund.
Employees Provident Fund had sent letter to NAC after the corporation did not pay installments regularly.
Employees Provident Fund and Citizen Investment Fund both gave 12 Billion each loan to NAC under the government witness.
The corporation had bought two wide-body aircraft by spending around NRs 24 Billion where its annual interest is more than NRs 2 Billion 52 crore. It has been over 6 months of the arrival of wide-body aircraft to Nepal.
NAC claimed to have increased its market share of 17% after two Wide body aircraft was purchased and publicly planned to serve more than one million passengers.
Likewise, the issue of irregularities in the procurement process of two wide body aircraft of the corporation has been running from long time but the total information has not been revealed yet.