US-based AAR Corp has submitted the lowest bid to supply two Airbus A330-200 long-range jets to Nepal Airlines Corporation (NAC), according to the evaluation committee’s report submitted to the NAC management last week. 

The American aviation support company has quoted a price of $104.8 million for each jet, and said that it would deliver the first of the two planes by mid-April, five months prior to the proposed deadline.

There were 11 hopeful suppliers, and the highest price quoted was $146 million. NAC had formed an 11-member evaluation committee to study the technical and financial proposals of the prospective suppliers.

“We are preparing to submit the report to the NAC board for further examination,” said NAC Managing Director Sugat Ratna Kansakar. He said that the ‘offer price’ was not the final price as it may go up slightly due to inflation when final contract negotiations are completed with the supplier. 

“After the board gives its go-ahead to appoint the lowest bidder, we will ask the company to submit letters of intent,” said Kansakar. “A memorandum of understanding will then be signed before entering into contract negotiations.” 

A purchase agreement will be signed after the negotiations when the cost of the aircraft will be finalised, he added. “So the ‘offer price’ and the ‘contract price’ may be slightly different.” Kansakar said that the entire process could be completed within three weeks. 

A notice inviting proposals from aircraft manufacturers, airlines, aircraft leasing companies and bankers for two Airbus A330-200 aircraft was issued on September 26. 

Buddhi Sagar Lamichhane, joint secretary of the Tourism Ministry, who sits on the NAC board, said that the board would review the evaluation report before allowing the corporation to confirm the order. “If necessary, a sub-committee will be constituted.” 

The national flag carrier has planned to induct one A330 aircraft into its fleet by September 2017 and another by March 2018. NAC has stipulated that the jets should not have more than 1,000 flight hours on them, and that the date of manufacture should not be before January 2014. The A330-200 it plans to buy can accommodate up to 280 passengers in a two-class layout. 

The supplier should include the cost of a minimum set of flight and maintenance crews for the duration of at least one year. It should also include the cost of consumable spares and tools required for day-to-day line maintenance up to the ‘A’ check level for a year.

The carrier has proposed procuring long-range jets to serve destinations in North America, Japan, Australia and the UK as they have been identified as prospective markets for Nepal over the next 20 years.

Nepal Airlines holding talks with potential lenders

KATHMANDU: Nepal Airlines Corporation (NAC) has said that the bid evaluation process and the arrangement of funds to buy the planes were being pursued simultaneously.

“A few rounds of negotiations have been completed with a number of private financial institutions, including two state-owned firms; and they are ready to finance the project,” said NAC Managing Director Sugat Ratna Kansakar. “We have been requesting the financial institutions to provide credit at 7 percent interest per annum. Some of them have offered loans at 8 percent.”

The interest rates offered by the financial institutions will be discussed at the NAC board, he said, adding that after the board gives the go-ahead, formal negotiations would be launched. Kansakar said that if the interest rates did not differ much, NAC would prefer to borrow from state-owned lenders. (PR)