HEADLINE NEWS THE RISING NEPAL (DAILY)

RNAC White Paper refutes irregularities on Lauda deal

Kathmandu, Feb. 24 (RSS): The Royal Nepal Airlines Corporation (RNAC) has made it clear that due to a lack of specific act, rule or regulations regarding the procurement of aircraft on lease, the Lauda Aircraft procurement deal was concluded by exercising the right given by Rule 4.6 (G) of the Corporation’s Financial Administration Regulation 2042 B.S. and clause 73 (2) (h) of His Majesty’s Government’s Financial Administration Regulation 2056 B.S.

In a white paper regarding the Lauda Aircraft procurement deal issued here today, RNAC has also said that the 18 aircraft procurement deals concluded in the past were also taken as precedence. The deals were concluded not through bidding, but through direct negotiations, it added.

Since several sincere attempts to procure an aircraft as suggested by the Commission for Investigation of Abuse of Authority (CIAA) failed to bring any positive results despite repeated calls for tenders, and sealed offers made through major local newspapers and the internet, RNAC, which was in dire need of aircraft, concluded the deal through direct negotiations on the basis of legal advise in this regard, it is stated in the white paper.

As per the international practice of leasing out aircraft, the aircraft owner or operator puts the information on the internet months before the possible delivery date and contact several interested parties at the same time. On receipt of the interested parties’ responses, the aircraft owner concludes a deal with a party, which, its thinks, is the most reliable and is willing to conclude the deal at the earliest. Aircraft owners do not want to delay the deal by requiring premium for bidding nor do they lease out aircraft only through bidding, it is stated.

After the bidder, ICTC informed RNAC that it can provide the B767-300 IR Aircraft of Austrian Lauda Airlines an inspection team of the corporation reached Vienna on Sept. 21, 2000 and inspected various physical and technical aspects of the aircraft. After the detailed inspection, RNAC had detailed negotiations with Lauda and concluded the procurement deal for 18 months on 27 Sept. 2000. RNAC has, thereafter, been depositing the payments it has to give to Lauda Airlines in the airlines’ bank account no. 105-105-523 as stated in the lease agreement’s clause 8.4. no other bank account has been used for the payments, according to the white paper.

The Lauda Aircraft was procured as per the corporation’s 15-year plan, which requires RNAC to operate at least seven wide-body aircraft in international sector, the white paper said, adding the cost of leasing the Lauda Aircraft is quite low compared to the cost of other aircraft leased so far.

Stating that disturbances like the hotel employees’ strike, the strike in protest against Indian film star Rhitik Roshan’s remarks about the Nepalese and other violent activities have adversely affected the outcome of all international flights, it said should the situation remain normal operation of the Lauda Aircraft will of course bring good profit to the country.

After deciding to procure the Lauda Aircraft, which was needed most to attain the set goals, RNAC sought the government’s recommendation for issuance of foreign currency for a bank guarantee equivalent to one month’s payment plus one month’s payment to lauda airlines. The government then gave necessary permission.

RNAC received the Parliamentary Public Accounts Committee’s first instruction that required a halt on the process of procuring the Lauda Aircraft on Nov. 20,2000, while the corporation had already made a payment in the form of bank guarantee on Oct. 31, 2000 and had opened the letter of credit on Nov. 16, 2000. This being the situation, RNAC was not in a position to execute the public accounts committee’s instruction as execution of the instruction in that situation meant a serious set back to the corporation’s credibility, it is stated.

The Public Accounts Committee’s second instruction reached the RNAC on Nov. 30, 2000. But on the same day the Lauda Aircraft left Europe and arrived in Kathmandu the next day as per the schedule. RNAC, thus, was not again practically in a position to execute the second instruction as well, it is stated.

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