The Tourism Ministry has tabled yet another proposal at the Cabinet to take delivery of four Chinese-made aircraft on order after the previous proposal was returned.

The aircraft procurement process has been put on hold for the past year after NAC reported many problems with the planes.

As per the revised proposal, which was tabled two weeks ago, the ministry has sought the Cabinet’s permission to allow Nepal Airlines Corporation (NAC) to sign another agreement with AVIC International Holding Corporation, the supplier of the problem-plagued MA60 and Y12e aircraft.

On November 29, 2012, NAC and AVIC had signed a commercial agreement for six aircraft. Two of them—MA60 and Y12e—have already been delivered.

Ministry sources said the proposal includes an agenda to revisit the accord signed with the supplier earlier as it did not address long-term maintenance and training, engineering service and crew support programmes, among others, required for sustainable operation of the aircraft in the Nepali skies. 

“If the revised proposal is okayed and the supplier also agrees to review the accord, it will guarantee that NAC reaps the benefits while flying the aircraft in the Nepali skies,” the sources said. 

In the second week of February, the ministry had tabled the first proposal at the Cabinet after NAC agreed to take delivery of the four aircraft. However, it had placed five key conditions.

The national flag carrier had demanded that AVIC guarantee compensation for losses incurred while flying the planes in Nepal with a load penalty.

The 56-seater MA60, which Nepal had received as gift from China, arrived in Kathmandu on April 27, 2014, and has been operating with a load restriction on the Nepalgunj, Biratnagar, Bhairahawa, Bhadrapur and Pokhara sectors. 

Another Chinese-gifted aircraft—the 17-seater Y12e—landed in Kathmandu on November 3, 2014. It can be used to serve remote airfields like Lukla, Jomsom, Manang, Simikot, Rara, Jumla and Dolpa with a load restriction.

A government fact-finding committee had found the MA60’s utilisation was very poor in Nepal. NAC had been operating only eight weekly flights with the plane. The Y12e has been grounded for several months due to a shortage of pilots. It has still not been cleared for mountain airfields due to regulatory restrictions.

The second condition put forth by NAC was assurance of spare parts and maintenance support for 10 years. NAC’s third condition was the crew training costs be reduced to the same level as that for the Twin Otter and ATR aircraft that have been operating in Nepal. NAC’s fourth condition was insurance premiums be the same as for other aircraft flying in Nepal. 

The corporation’s final condition was English-speaking pilots and engineers be made available and the aircraft manual also be produced in English.

On November 14, 2013, the Cabinet had given the go-ahead for the government to sign loan and grant agreements with China to procure six aircraft for the national flag carrier.