China doing business by drowning Nepal in debt

Even after more than 6 decades of its establishment, the government flag carrier Nepal Airlines Corporation has been in the grip of debt for a long time. The corporation, which is drowning in debt of nearly 50 billion, is drowning more due to Chinese planes.

According to the plan to take the corporation to profit, those Chinese planes were purchased about 8 years ago. Four Y12 and Two MA-60 planes were bought with soft loan and subsidy with bilateral agreement between Nepal government and Chinese government. The agreement for the purchase of Chinese planes was made in 2070 BS, according to which the MA-60 and Y-12 planes were to be taken under subsidy and the MA-60 and three Y-12 planes were under loan.

About 7 billion rupees were spent on the purchase of 6 Chinese planes, which burdened the corporation financially. These planes, which were brought in with the purpose of serving the people of the hilly and Himalayan regions, had become useless within 3 years. The corporation had to bear losses from the planes everyday. According to the statistics of the corporation, an average annual loss of 38 million rupees has been incurred since 2071 BS while flying these planes.

The Chinese planes was purchased by the corporation to replace the Twin Outer DHC 6 model planes which were in domestic service for the past 40 years. The Ministry of Tourism was the one who insisted on the purchase of Chinese ships. The then government was led by Baburam Bhattarai in which Lokendra Bista Magar was the Minister of Tourism and Barshaman Pun was the Minister of Finance. Those ships were bought from Avic International, which is an investment of the Chinese government.

After sometime it was found that the MA 60 planes was with the low load capacity. Similarly, slowly onwards , the financial burden on the corporation has been increasing since the ship started experiencing technical problems.

The corporation has started preparations for sale of grounded planes. A month ago, two representatives of the American Avian Asset Management Company arrived in Kathmandu to evaluate the sale of grounded Chinese planes for three years. The corporation said that the company will be evaluated the planes within a month. One of the six ships, Y12 had met with an accident in Nepalgunj.

The corporation is about to remove the aircraft due to lack of pilots, lack of maintenance and spare parts, high fuel consumption and non-profitability.

Sources says that the government is preparing to buy Chinese planes again. The corporation is going to purchase three planes for remote areas. In the statement issued by the corporation on Monday, it is said that a seven-member sub-committee has been formed under the leadership of Sudhir Samsher Rai, a member of the corporation’s board of directors.

The corporation has also said that it will purchase aircraft for domestic flights from its own resources.

Similarly, in the 60th annual report of the financial year 2078/079 published by the office of the auditor general it is stated that the interest amount of the corporation has increased to 14.15 billion rupees because the corporation did not pay the interest of the 12 billion loan taken by the corporation from the employees provident fund for the purchase of widebody aircraft.