Govt, Chinese firm sign deal to procure 6 planes
KATHMANDU, DEC 02:
In a major development aimed at expanding the fleet of Nepal Airlines Corporation (NAC), the Ministry of Culture, Tourism and Civil Aviation (MoCTCA) on Thursday signed a commercial agreement with Avic International of China to procure six aircraft through grant and soft loans.
Under the agreement, the government has committed to buy two 58-seater MA 60 and four 19-seater Harbin Y-12 from Avic International. Of them, the government said one MA 60 and a Harbin Y-12 will be procured under grant, while another MA 60 and three Harbin Y-12 will be bought through soft loan from the Exim Bank of China.
According to NAC, Ranjan Krishna Aryal, Joint Secretary of the MoCTCA and board member of NAC, and Raju KC, acting Managing Director of NAC, signed the commercial agreement on behalf from the government. Likewise, Asia Director of Avic International Yang Kum Bang and its General Representative and Program Manager Song Siyao Ning signed the agreement from the Chinese side.
The signing took place in the presence of senior ministry officials, NAC board members, and the officials of Embassy of China in Nepal.
"The agreement has been signed as per the approval of the government," said Joint-secretary Aryal, referring to the Cabinet´s November 25 which sought the MoCTCA and other ministries to identify the needs of NAC and make joint efforts to buy the aircraft for the ailing national flag carrier.
Though the agreement mentions Chinese Exim bank´s grant and loan as the source of funding to execute the procurement deal, it does not cite the total cost of the procurement.
Aryal said the loan agreement between Exim Bank of China and Ministry of Finance (MoF) of Nepal will define the exact cost of the project. However, officials at the MoF said the cost should be determined by the MoCTCA, as MoF will only handle the negotiations on terms and conditions of assistance with the Exim Bank.
NAC officials, meanwhile, disclosed that the cost of the proposed aircraft has been finalized to stand around US $ 35 million for three Y-12 and a MA-60, including the cost of spare parts.
Following the signing of the agreement, NAC also held its board meeting, which decided to make all efforts to complete the procurement process as soon as possible.
However, for its execution, NAC board has assessed the two countries would first need to finalize the assistance agreement. Likewise, the civil aviation authorities of the two countries would also need to sign another agreement on the technical feasibility of operating the aircraft in Nepal, among other things.
"Once these procedures are completed, it will take around three months for the aircraft to be procured through grant to arrive to Nepal," NAC said in a statement. "The four aircraft bring purchased through soft loans will take another five months to be delivered to NAC," the statement added.
The government earlier this year had revived the process to procure eight aircraft, including 6 Chinese aircraft and two large aircraft, to NAC for operating domestic and international flights respectively.
Source: Republica
