Corruption case disrupts Nepal Airlines’ new aircraft purchase

Kathmandu, August 14:  The procurement process for three Twin Otter aircraft initiated by Nepal Airlines Corporation has been halted. This interruption follows allegations of corruption amounting to approximately 1.5 billion rupees in the acquisition of a previous widebody aircraft. The Commission for Investigation of Abuse of Authority (CIAA) has filed a case against 32 individuals, including the former minister, in the Special Court.

In April 2024, the Commission filed the case in a special court against 32 people, including the then Minister of Culture, Tourism, and Civil Aviation, Jeevan Bahadur Shahi, claiming a financial irregularity of 1,047,010,482 rupees.

Deputy General Manager Janak Kalakheti, former Chairman Shankar Prasad Adhikari, and Managing Director Sugaratna Kansakar have been implicated in the case. As a result, the procurement process for the aircraft has been affected, according to sources at the corporation.

The case also involves members of the procurement sub-committee, and the ongoing legal issues have caused concern among other corporation employees. The procurement process for the new aircraft has been stalled as a result.

Sources indicate that Deputy General Manager Kalakheti, who leads the sub-committee for the three Twin Otter aircraft procurement, has been caught up in the case, impacting the current procurement process.

On October 22, 2023 the corporation issued a 45-day notice inviting international bids for the aircraft purchase. By the December 5, 2023 deadline, three companies—Hindustan Aeronautical Limited (India), De Havilland (Canada), and Aircraft Industries (Czech Republic)—had submitted applications. However, the process was disrupted by the scandal related to the previous widebody aircraft.

Previous attempts of purchase

In August 2020, then Tourism Minister Yogesh Bhattarai instructed the corporation to proceed with the procurement, citing a need for more aircraft for domestic flights. Under the leadership of Executive Chairman Sushil Ghimire and Director General Dimprakash Paudel, the corporation planned to purchase two narrowbody aircraft and three small Twin Otters to meet service demands.

Despite strong efforts from former Minister Sudan Kirati to advance the procurement, the process faced delays and complications due to the ongoing case, leading to a general sense of uncertainty among corporation staff.

Uncertainty reins over leasing

Additionally, the process to lease chartered aircraft has also been delayed. The corporation had planned to lease two narrowbody aircraft to expand its service capacity. However, this process has also stalled due to the legal issues.

The corporation had announced on February 6, 2023 that it intended to lease two narrowbody aircraft on a wet lease basis to enhance its tourism services. Despite inviting international bids and receiving interest from seven companies, the leasing process has been halted due to the case with the CIAAA.

Spokesperson Ramesh Paudel informed Ratopati that while seven companies expressed interest in the lease, the process has been delayed. The corporation had hoped to finalize the leasing arrangements and put the aircraft into service by July 2024, but the ongoing case hindered the plan.