Office of Auditor General states NAC purchased two aircraft violating Financial laws

Posted on by Biju Shrestha

Office of Auditor General has reported about flaws seen in process and method of purchasing wide-body aircraft by Nepal Airlines Corporation (NAC); the national flag carrier.  However the corporation has claimed the procedures to be within the law. The report of the Auditor General has shown an error in the purchase of two big wide-body A330-200 aircraft by the corporation.

According to the report, the corporation ditched its corporate regulation of 2065 and agreed in aircraft purchase from agents of aircraft suppliers which is not enforced in law. The report also states that law process has not been made to buy new aircraft and called for tender without stating weather new or old and just by stating that the aircraft shouldn’t have flown for more than 1000 hours.

Meanwhile, officials of corporation has claimed that the purchase was done following the law and the process of aircraft procurement was done on the basis of tender at relatively low cost.

Rabindra Adhikari, NAC Spokesperson said that they haven’t used mediators while purchasing and as the subject was technical, they haven’t been able to explain it. He also added that the aircraft was purchased with competition among companies at cheaper price.

The corporation said to purchase new aircraft it would take long time and to follow different condition so they provided tender to 10 different companies and purchased the aircraft from that company which provided the aircraft which haven’t flown for long time at low cost.

NAC agreed on purchasing the aircraft from American leasing company AAR for two wide-body A330-200 aircraft on 2073 chaitra 25.

According to Regulation 236 (1) of the Corporation’s Corporate Regulations, 2065, only a new aircraft could be purchased with the manufacturer. And no importance was given to achievements, training, technical support and warranty of flight service that one can get after buying directly from manufacturing company.

Corporation proceeded to buy the aircraft from other company rather than manufacturing company that have Rolls Royce Trent 772 B engine with 18 business class and 238-262 economy class seat and have flown less than 1000 hours.

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