EPF, CIT ask CAAN to stop sale, lease of wide-body aircraft

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A new first long-range Airbus A330-200 aircraft of Nepal Airlines Corporation is welcomed by a traditional water cannon salute at Tribhuvan International Airport in Kathmandu, on Thursday, June 28, 2018. Rolls-Royce Trent 700 engines power the new aircraft. Photo: Skanda Gautam/THT

KATHMANDU: In a recent development, the Employees Provident Fund and the Citizen Investment Trust have written to the Civil Aviation Authority of Nepal — country’s aviation sector regulator — not to allow Nepal Airlines Corporation to either sell or lease the wide-body aircraft that the national flag carrier recently acquired without their permission.

The EPF and CIT have provided a loan of Rs 12 billion each to NAC to purchase the long-haul planes.

According to Sanjeev Gautam, director general of CAAN, EPF and CIT have written to the regulatory body asking it to not allow NAC from selling or leasing the aircraft if the corporation wishes to do so any time in the future without their consent.

“We have started the process to address the concerns of EPF and CIT and we will be finalising the issue in a week.”

Gautam further informed that one of the wide-body aircraft with call sign 9N-ALZ is under primary ownership of EPF and secondary ownership of CIT. Likewise, the other aircraft with call sign 9N-ALY is under primary ownership of CIT and secondary ownership of EPF.

In April 2017, NAC had signed a purchase agreement with the United States-based AAR Corporation to buy two 274-seater Airbus 330-200 series wide-body aircraft worth $209.6 million. NAC had received its first aircraft in June and the second one in July.

The EPF has said that they have written to CAAN requesting it to make an arrangement so that they could take full ownership of one of the planes. “One of the wide-body aircraft is our property till NAC clears our loan,” said Rajendra Kafle, chief officer at EPF.

As per the initial agreement, EPF and CIT had provided the loan to NAC at an interest of 10.5 per cent per annum. In April 2017, the government had decided to act as a guarantor for the purchase of the two wide-body aircraft by Nepal Airlines Corporation. A meeting of the Council of Ministers had taken a decision in this regard.

Meanwhile, NAC has been facing criticism over the aircraft purchasing process in recent days, and doubts have emerged as to whether the aircraft were purchased or brought on lease.

However, General Manager of NAC Sugat Ratna Kansakar, has said that the ownership of the two wide-body planes has already been transferred to NAC. “This is only a rumour that some people are spreading to tarnish image of NAC.”


The post EPF, CIT ask CAAN to stop sale, lease of wide-body aircraft appeared first on The Himalayan Times.

Written by Sureis
This news first appeared on https://thehimalayantimes.com/business/epf-cit-ask-caan-to-stop-sale-lease-of-wide-body-aircraft/ under the title “EPF, CIT ask CAAN to stop sale, lease of wide-body aircraft”. Bolchha Nepal is not responsible or affiliated towards the opinion expressed in this news article.