Money

Finance Ministry tops list of non-paying tenants at airport

- SANGAM PRASAIN, Kathmandu

Mar 18, 2019-

The Finance Ministry holds the number one spot in the list of non-paying tenants at Tribhuvan International Airport with more than Rs548 million in outstanding rentals.

Airport officials told the parliamentary Public Accounts Committee on Sunday that nearly 200 tenants, including airlines, shops and restaurants, owe them a combined Rs2.47 billion in rentals and fees. They said they had sent six reminders to the Finance Ministry as of March 2016 requesting it to settle the outstanding rentals of its customs office housed at the airport.  

Rajan Pokhrel, deputy director general of the Civil Aviation Authority of Nepal, told the Public Accounts Committee that on July 10, 2018, the Finance Ministry had requested it to write off the dues. “We are not able to make any decision on this matter,” he told lawmakers.

Nepal Airlines Corporation comes second in the list of defaulters with dues amounting to Rs340 million, including Rs70 million in unsettled airport development tax. Private carrier Himalaya Airlines owes Rs164 million, including Rs50 million unpaid airport development tax.

Domestic carrier Saurya Airlines owes Rs35 million to the airport.

“We have warned all airlines to pay their dues within three months. If not, we will ground them,” General Manager Raj Kumar KC of the airport told lawmakers.

KC said nearly five dozen shops, money exchangers, gift shops, tea and coffee shops and restaurants have been operating from a long time at the domestic and international terminals even though their leases expired years ago. “More than 20 court cases are ongoing. We cannot evict them and invite fresh tenders until we get the final verdict from the court,” KC told lawmakers. One recent case is of Hotel Radisson at the airport. 

According to KC, the airport allowed the Hotel Radisson to operate the executive lounge restaurant in August 2007 for 10 years at a two-yearly rental of Rs20 million. “When we decided to raise the rental fee to Rs3,000 per square metre from Rs900 per square metre, they went to court and brought a stay order,” he said. “However, these shops, money exchangers and restaurants have not defaulted on rental payments.”

“It’s anarchy. Shops and restaurants inside the airport charge customers more than four times the normal rate and they don’t pay their dues,” said lawmaker Prem Ale. Another lawmaker Surya Pathak said that a cartel had been firmly entrenched at the airport for nearly two decades. “The old shops and service providers don’t want new players coming in,” he said.

The Civil Aviation Authority of Nepal has racked up accumulated losses of Rs1.15 billion since its establishment.

However, it made a net profit of Rs1.89 billion in the fiscal year 2011-12.

Since then, it has been enjoying profits. Its revenues come from aeronautical and non-aeronautical sources. Rentals from shops, money exchangers and restaurants are non-aeronautical incomes.

The country’s severely saturated sole international airport handled 7.19 million passengers, including 4.34 million international passengers, last year. There were a total of 129,511 flights in the Nepali skies, with 74 percent of them being domestic flights.

Published: 18-03-2019 08:08

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