The Ministry of Finance ( MoF) returned back a file via the Ministry of Culture, Tourism and Civil Aviation (MoCA) to the Nepal Airlines Company (NAC) questioning regarding the current explanations for the decision for grounding Chinese aircraft. This news has been posted in Kantipur News.
The Board of Directors of the Nepal Airlines agreed, from June 30 onwards, to ground the remaining five aircraft, highlighting that perhaps the Chinese aircraft cumulative operational expense will be Rs 500 million.
Suresh Acharya, Acting Secretary of the Ministry of Culture, Tourism and Civil Aviation, reportedly asked the Ministry of Finance’s viewpoint on aircraft management after the Ministry initially failed to respond to the Nepal Airlines letter directly.
Nevertheless, the Ministry of Finance official stated that the Ministry of Finance, which had concluded a loan and grant arrangement with China to buy the aircraft, had returned the file, questioning why the aircraft had been grounded. “The Nepal Airlines was questioned whether the aircraft did not work based on the feasibility report,” the official said.
“Since the responsibility for the commercial activity and maintenance of the Chinese aircraft lies with the Nepal Airlines, the Ministry of Finance is unable to provide details on the aircraft’s technical aspects,” the Ministry of Finance said in a confidential letter to the Ministry of Culture, Tourism and Civil Aviation.
Similarly, a source in the Ministry of Culture, Tourism and Civil Aviation claimed that the NAC technical team was questioned regarding the claim that the aircraft would be feasible before taking them to Nepal.
In November 2011, on behalf of Nepal Airlines, a team including Deputy General Manager Ganesh Thakur was active in the procurement process. Deputy General Manager of Engineering Thakur, pilots Shravan Rijal and Vijay Lama and engineer Santosh Kumar Khati and Acting Director of Commerce Kiran Pant visited Harbin, China, according to the Government Order. Thakur’s technical team submitted a report that the MA-60 was suitable for Trunk routes, and the Y12E was suitable for remote areas based on the requirements issued by the manufacturing company at the time.
“The technical committee containing Nepal Airlines experts provided a study before approving the new aircraft. What is the reason for not feasible right now?” the finance secretary asked for the clarification.
The Ministry of Finance asked whether the NAC had intended to perform commercial flights or not and, if so, what is the state of the current operation.
The spokesperson for the NAC, Archana Khadka, confirmed that the NAC had written an answer to the query and submitted it to the Ministry of Culture, Tourism and Civil Aviation. However, a ministry official said the letter written to by the NAC had not been received by Wednesday afternoon. The official confirmed that a letter from the Ministry requesting another approval to ground the aircraft would be submitted after obtaining the corporation’s letter.
The corporation’s Board of Directors, which plans to raise its domestic market share to 30% by launching six Chinese aircraft in the last six years, showed an operational loss of Rs 1,90 billion. It was determined that all the five remaining aircraft would be grounded.
The aircraft was bought with a concessional loan and grant from the Exim Bank of China by then Prime Minister Baburam Bhattarai-led government. However, a member of the company’s board of directors said that by mid-July, Nepal’s government had suffered a loss of Rs 6.64 billion, including the additional loss from NAC.
One of Y12e met with an incident in Nepalgunj on 28 March 2020. In Kathmandu, three Y12Es and two MA60s are reportedly grounded.