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AIRCRAFT LEASING |
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AIRCRAFT LEASING |
Bone Of
Contention Mud-slinging
at each other in public, Tourism Ministry and the national flag carrier expose no love
lost between them BY NAVIN
SINGH KHADKA Washing dirty
linen in public. This is what exactly Ministry of Tourism and Civil Aviation and Royal
Nepal Airlines Corporation were engaged in till earlier this week. With the three month extended lease period of the Boeing of China South West
Airlines as the bone of contention, the national flag carrier and its line ministry have
even resorted to media-war. One day after the MoTCA called a press conference last week warning that it
would make necessary investigation on what it called RNAC's indifference toward
government's instruction to lease aircraft, the national airline offered a lengthy
explanation in the dailies. Tarini Dutta Chataut, Minister for Tourism and Civil Aviation, in the press
meet cried foul on RNAC's move to extend the lease period of the Boeing 757 of CSWA. The
recently appointed minister charged the state-owned airline of ignoring the government's
instruction to lease aircraft only under global tender process. "We have the compulsion to use the aircraft with the extended lease
period since RNAC badly needs an aircraft, but we will investigate why did the corporation
not lease aircraft according to the guidelines set by the Ministry." MoTCA, in line with the suggestion of the Commission of Investigation of
Abuse of Authority, had asked RNAC to go for global tender from the prequalified suppliers
of aircraft issuing a 35-day notice. "The idea is to maintain transparency since
RNAC's aircraft leasing has always drawn criticism." In line with the same official instruction, RNAC did call for a global tender
in February seeking to lease a Boeing 767 300 ER last year. Since no qualified company,
according to RNAC managers, responded to the tender in the first notice, the state airline
repeated the same tender notice, this time deadline to respond was seven days. With no company having responded to the tender call, RNAC called a new global
tender on March 12 last month. The new tender notice required the aircraft to be not more
than 10 years old. By the time it brought out the 35 -day notice, time was already running
out for the national flag carrier since the contract was expiring on 27 March Boeing. "Even if a qualified company applies in the tender bid, it will take at
least three months for the aircraft to reach here," says Bharat Bahadur Karki, the
relieved Executive Chairman of RNAC. "Because RNAC's international scheduled flights
are based on three flights, we extended the lease term of the Boeing of CSWA." Few days after he offered his explanation in dailies, Karki was called back
to the ministry. As of writing this, Hari Bhakta Shrestha, Joint Secretary at the Ministry
of Tourism and Civil Aviation, has been appointed the chairman of RNAC.
In its explanation in the newspapers, RNAC has countered the ministry's
charge that it (the corporation) cannot extend the lease period of the Boeing of
CSWA. "Article 3.4 of the agreement signed between RNAC and CSWA stipulates the
extension of the lease period. More over, the instructions issued by the ministry and CIAA
also leaves enough legal scope for the national flag carrier to extend the lease
period." The national flag carrier has also cited the MoTCA's letter it received some
two months back to press its point for its decision making process. "The official
letter clearly cites that RNAC's Board of Directors has the authority to decide on the
issues related to the leasing of aircraft and therefore the government should not issue
any instruction on the matter." RNAC's public explanation cites yet another letter issued by the MoTCA that
reads: Since RNAC is an autonomous body, it should be able to tale necessary actions as
instructed by the government to lease an aircraft. Citing these letters, Karki argues that his move to extend the lease period
of CSWA Boeing should not have triggered any controversy. "I did call for the
global tender thrice, but when we don't get the right response, what do I do?" Ministry officials, however, do not subscribe to Karki's claim. "Why did
RNAC bosses not begin the lease process six months ago?" asks Hari Bhakta Shrestha. True, the question gives a pause. Karki was appointed the Chairman of RNAC
last September while his office called for the global tender to lease an aircraft only in
February -- one month before the leased aircraft of CSWA was flying back. "RNAC should have its work plan at least one year in advance,"
asserts Shrestha. When he was appointed chairman, Karki knew pretty well that the leased Boeing
757 of CSWA was flying back in March. So, why did he not take the action at the right
time? Simple: It has been the tradition of the politically appointed RNAC bosses not to
take the decision at the right time. Almost all of RNAC's aircraft leasing decisions in the last five years have
taken place at the eleventh hour -- meaning, few days before the expiry of the lease
period. And each boss has had his own explanation for the delayed decision. This is what Karki had to say: "After I took over RNAC office, there was
the talk of lease purchasing a Boeing 767 300 ER. There were positive indications even
from the Ministry. And that was the reason why we could not make the tender call
earlier." How credible were Karki and his predecessors' explanations may still become
debatable. But one fact is enough to prove how serious politicians and bureaucrats have
been to strengthen RNAC: More than four decades after it was established, RNAC is yet to
have a rule to lease aircraft. "There is virtually no legal provision in RNAC to lease an
aircraft," said Karki. "The leasing deal that took place during my tenure was on
the basis of RNAC's tradition." Neither the RNAC Act 1962 nor the Financial Administration Regulation 1985,
has any provision about aircraft leasing. Yet, the national airline has already spent a
whopping 50 million US Dollars in aircraft leasing in the last five years.
But, more interesting than that is this: MoTCA and RNAC -- the line ministry
and the corporation under it -- had to resort to media to mud-sling at each other.
As if they could not settle down the matter sensibly. Restructuring
Of The Cabinet King Birendra has, upon the recommendation of Prime Minister Girija Prasad
Koirala, has reshuffled the month-old cabinet on Tuesday as follows: G. P. Koirala Prime Minister Royal Palace, Defence, Women, Children and
Social Welfare, Labor and Transport Management, General Administration Ministers Khum Bahadur Khadka-- Water Resources, Physical Planning and Works Ministers
of State All the other
ministers and their portfolio remain same as designated on March 21. King Birendra has also approved the HMG Work Allocation Regulation, 2057.
Accordingly, the number of Ministries have been reduced to 21 (besides the Cabinet
Secretariat and Prime Ministerís Office) from existing 26 as follows: 1. Ministry of Finance 2. Home 3. Industry, Commerce and Supplies 4.
Law, Justice and Parliamentary Affairs 5. Agriculture and Cooperatives 6. Population and
Environment 7. Water Resources 8. Foreign 9. Land Reforms and Management 10. Physical
Planning and Works 11. Women, Children and Social Welfare 12. Defence 13. Forest and Soil
Conservation 14. Science and Technology 15. Education and Sports 16. Labor and Transport
Management 17. General Administration 18. Information and Communications 19. Culture,
Tourism and Civil Aviation 20. Local Development, and 21. Health |
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