Business»
Scrap the Airbus deal, MoF instructs MoTCA
KATHMANDU, JUN 02 -
The Ministry of Finance (MoF) has asked the Ministry of Tourism and Civil Aviation (MoTCA) to scrap its purchase plan of two aircraft for Nepal Airline Corporation (NAC). The MoF on May 25 forwarded a letter to MoTCA expressing inability to provide a guarantee for the loan required to purchase the two aircraft and asked MoTCA to scrap the purchase process as evaluation and selection process of the aircraft was against the public procurement law.
The MoF letter has put paid to NAC's 13-month effort to modernise its fleet after it initiated the purchase process in April 2009. The MoTCA had sent a letter to the MoF seeking its guarantee for the purchase of the aircraft from Airbus. In response, the MoF has sent the letter of refusal as per a ministerial decision. "We received the letter yesterday and are discussing it," said Ranjan Krishna Aryal, acting Secretary at the MoTCA.
The MoF has asked the MoTCA to initiate the process to get back the lock-up money that was sent to the Airbus without making financial closure. It has also instructed the MoTCA to take action against those officials involved in sending the lock-up money. The NAC had sent US$750,000 to Airbus SAS as lock-up money without managing the source for the purchase of aircraft.
NAC's board had decided to purchase two aircraft from Airbus SAS - Airbus A320-200 (narrow body) and A330-200 (wide body) on Oct. 26, 2009. The NAC had opted for Airbus after evaluating proposals from two leading producers of passenger jets - France-based Airbus SAS and US-based Boeing.
Even though the NAC sent the lock-up money, it had yet to cough up the required fund for aircraft purchase. The Employment Provident Fund (EPF) had said that it was ready to lend Rs.10 billion to the NAC but asked for a government guarantee, which the government didn't give. The Public Accounts Committee (PAC) of the parliament on Dec. 28, 2009, had directed the government to cancel NAC's Airbus deal and asked the government to take legal action against the officials involved in sending lock-up money. The parliamentary body then had asked the MoF to take the lead in implementation and monitoring of a new purchase process.
The MoF in its letter has asked the MoTCA to initiate a new purchase process for the NAC. "The new aircraft should be purchased for those routes where the NAC can make profit," read the MoF letter. The MoF has asked the MoTCA to ensure financial closure and government guarantee before finalising the bidding process for new aircraft.
Timeline
April 09, 2009 NAC initiates purchase process
Sept. 09 PAC tells NAC to belay purchase plan
Oct. 26 NAC board decides to buy two Airbus aircraft
Nov. 6 NAC signs MoU with Airbus
Nov. 7 NAC sends commitment money to Airbus
Nov.17 Airbus formally announces MoU
Dec. 9 FM Pandey meets envoys for transparency in deal
Dec. 17 EU envoys press Sujata for Airbus deal
Dec. 28 PAC tells government to cancel deal
May 25, 2010 MoF writes to the MoTCA to scrap purchase process
Posted on: 2010-06-03 08:04
Headlines
Advertisements
