SANGAM

Taskforce suggests turning NAC into public company

SANGAM PRASAIN


KATHMANDU, MAY 26
A taskforce formed to study the procedures to convert Nepal Airlines Corporation (NAC) into a company has suggested that it be converted into a public limited company under the public-private-partnership model.
The taskforce submitted its report to the Minister of Tourism and Civil Aviation Sarat Singh Bhandari on Wednesday. Minister Bhandari said that the ministry was committed to implementing the recommendations in the report. "NAC would be viable if it was converted into a company," said Bhandari.
The government on Jan. 11 had formed a taskforce under the coordination of Murari Bahadur Karki, under secretary at the Tourism Ministry. However, the PPP model has been proposed by the government and other stakeholders several times in the past.
The taskforce has recommended that the new company be named Nepal Airlines Corporation Limited (NACL). It has recommended that the authorized capital and issued capital of the company be Rs. 30 billion and Rs. 28 billion respectively. It has suggested reducing the government's stake in the airline. According to the report, after converting NAC into a company, the stake of strategic partners will be 51 percent and the government's stake will be 49 percent.
Of the share allotted to the government, the taskforce has suggested that 10 percent be sold to tourism entrepreneurs, 5 percent to NAC staff and 15 percent to the general public. The remaining 19 percent should be kept by the government, said the taskforce.
The report has suggested that NAC be allowed to exercise the rights of the national flag carrier and ground handling authority even after its conversion into a company. The existing salaries, allowances and other facilities will remain unchanged, and the jobs of all the staff must be guaranteed, says the report.
The report has said that the amount of the investment will not be the decisive factor while choosing strategic partners. Experience in international aviation and financial and management capacity should also be taken into consideration when selecting strategic partners, states the report.
The Tourism Ministry will forward the report to the Ministry of Finance for further assessment. Meanwhile, NAC's overall assets have been evaluated at Rs. 16.80 billion. The assets evaluation report has valued the lands and buildings owned by NAC at Rs. 12 billion.