Nepali Ministry of Tourism and Civil Aviation asked to scrap Airbus deal

12:55, June 03, 2010      

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Nepali 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).

According to Thursday's The Kathmandu Post daily, 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 modernize 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. 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. The NAC had sent 750,000 U.S. dollars 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.



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