Employees Provident Fund (EPF) and Citizen Investment Trust (CIT) have reported that the national flag carrier Nepal Airlines Corporation (NAC) has stopped paying the interest of loan taken from two organizations for procuring 2 A330s.
EPF and CIT have sought the help of government to aware the corporation about the interest payment. Ministry of Culture, Tourism and Civil Aviation (CAAN) has already talked with officials from NAC and loan providers.
However, NAC officials insisted that they are unable to pay the interest at the moment instead they require another NRs 20 Billion for running the organization smoothly.
The corporation hasn’t paid interest to EPF for the month of Poush and CIT for the month of Chaitra. As per the report, NAC is still to pay the pending interest of Nrs. 41 crore for its widebody aircraft and Nrs. 34 crore for narrow body A320s. The total interest amount remaining to be paid for EPF stands at Nrs 1.12 Billion whereas Nrs. 41 crore for CIT. The two loan providers are being skeptical towards NAC’s hesitation to pay the interest.
EPF officials report that the national flag carrier is intentionally hesitating to clear the dues. EPF in the meeting held at Ministry suggested NAC to clear the dues by controlling the pay scale of its employees but NAC officials replied everything was in control of the government so they were unable to take such decision. EPF says that they will audit the financial and operational condition of NAC and will prepare report on how to move forward. They also said that it would be uncomfortable for EPF to provide loan to NAC in the future.
The procurement process of two A330s has aroused a concern for CIAA as the report on possible fraud case during the purchase has been published. CIAA has already instructed 7 int’l companies involved in the procurement process to be present within 7 days with necessary documents for investigation.
EPF claims that NAC can earn a staggering amount of Nrs. 30 cross if they operate A330s for 16 hours a day and even more if long haul flights can be conducted. However, two A330s are compelled to conduct short haul flights as NAC hasn’t received permission to operate flights to Japan, South Korea, Australia.