Nepal orders halt to plane deal with Austrian airline

The government order to Royal Nepal Airlines followed a public, media and parliamentary outcry over the controversial deal. The Public Accounts Committee of the parliament earlier this week had instructed the government to cancel the deal.

Under the deal, Royal Nepal Airlines was to acquire a wide body Boeing 767 from Lauda Air under a lease deal at a cost, on paper, of 3,350 dollars per flying hour with a minimum guarantee of 300 hours per month.

According to aviation experts in Nepal, the actual cost per flying hour would amount to over 4,000 dollars. The deal was signed in Italy on 27 September by the Managing Director of Royal Nepal Airlines and a representative of the Lauda Air. The deal has been under controversy ever since.

According to Nepalese rules, the Royal Nepal Airlines should have invited bids publicly from all parties interested in leasing out an aircraft. This was not done and Royal Nepal Airlines entered into bilateral negotiations with Lauda Air to conclude the deal.

Reports said that under its own rules the airlines should not have accepted an aircraft that was more than 10 years old. The aircraft offered by Lauda Air is over 12 years old. Despite the opposition, Royal Nepal Airlines has already sent a bank guarantee of over one million dollars to Lauda Air, according to government officials.

Royal Nepal Airlines flies to London, Frankfurt, Dubai, Osaka, Shanghai, Hong Kong, Singapore, Bankgok, and New Delhi, Bombay, Calcutta and Bangalore in India.

(la/dpa)