One more parliamentary committee eyes NAC deal

Now yet another committee has started probe into the Nepal Airline Corporation's Airbus deal, which has plunged into controversy. The Parliamentary Finance Committee on Wednesday held discussions with Finance Minister and Finance Secretary regarding the NAC deal to acquire two new aircraft from Airbus SAS. The Finance Committee raised questions as to why the government guarantee was required on behalf of Public Enterprises and NAC management.

"Providing guarantee to NAC means giving guarantee for its inefficiency," said former finance minister Ram Sharan Mahat. "If the management is efficient enough, government does not need to give guarantee." The Finance Committee is the fourth governmental body to initiate probe into NAC's aircraft deal.

The Parliamentary Public Account Committee (PAC), CIAA and Public Procurement Monitoring Office are already looking into this deal. There have been talks of converting NAC into a company and inviting strategic partner in it. International Finance Corporation (IFC) had shown its interest in NAC reform. "The issue of transparency and commission is extremely important," said Mahat. "Until the management is efficient, NAC can't compete in the international market whatever aircraft it buys."

In the past, the government had to pay loans in which it had given guarantee, said Mahat. "The government had to pay the loans of Orient Magnesite, Gorakhkali Rubber Udhyog and Butwal Power," Mahat cited examples. The row between NAC general manager and chairman as to who the executive is already under the purview of court and it has affected the daily work of NAC. If the government has to give guarantee then loan and guarantee act should be amended, said Mahat.

Hari Rokka, another member of the committee said that the debate over executive of the NAC should be resolved first. "Since finance ministry has to give guarantee for the deal, said Rokka, it comes under the purview of the finance committee." He however clarified that the finance committee is interfering in the probe process initiated by Public Account Committee (PAC). "NAC needs new aircraft but its management needs to be reformed," said Rokka. The committee has called another meeting on Dec. 27.

The NAC has signed a MoU with Airbus SAS for two aircraft. The purchase process has hit a snag after controversy erupted following NAC took a hasty decision to dispatch Rs. 57.3 to the Airbus SAS as 'commitment amount'.
Source:eKantipur