The government is finally procuring two and purchasing four – a
total of six aircraft from China – for national flag carrier.
Finance secretary Shanta Raj Subedi and Chinese ambassador to
Nepal Wu Chuntai signed worth two agreements – Framework Agreement on Provision
of Concessional Loan Assistance and Economic and Technical Cooperation Agreement
for Grant Assistance – worth Rs 6.77 billion on behalf of their respective
governments Today finalising the aircraft deal.
China will provide a grant of Rs 2.94 billion to procure a 19-seater
Y-12e and a MA60 in grant, whereas China EXIM Bank will fund Rs 3.72 billion in
soft loans to buy three Harbin Y-12e and a 58-seater Modern Ark 60 (MA60).
Nepal will have to pay an interest of 1.5 per cent per annum,
apart from 0.4 per cent service charge and management expenses. China has also provided
a seven-year grace period on the 20-year loan repayment deadline that will help
the national flag carrier enjoy earnings for during that period.
"The NAC must now prepare the loan repayment schedule and
commercial plan," said Subedi after the agreement.
Likewise, Chuntai, on the occasion, said that the new aircraft will help Nepal promote tourism.
Likewise, Chuntai, on the occasion, said that the new aircraft will help Nepal promote tourism.
The induction of new aircraft to the ailing Nepal Airlines
Corporation (NAC) is expected to give the ailing national flag carrier a new
lease of life as it has been left with only one aircraft for the domestic
flight.
China has pledged to deliver the aircraft gradually within three month
after today's agreement.
NAC is planning to operate the MA60 for mountain flights and other
accessible destinations like Pokhara, Bhairahawa, Biratnagar, Dhangadhi,
Nepalgunj and Simara, while Harbin Y-12e will be operated for mountain flights
and other remote destinations.
The NAC is planning to increase its domestic market share to
40 per cent in seven years.
However, NAC’s domestic market share has declined to less than five per cent due to lack
of aircraft. The number of annual domestic passengers stands at 1.58 million,
according to official data.
The loan agreement followed the Cabinet's decision on November 14 to
allow China made aircraft to fly in the Nepali skies, though some of the
aviation experts have still been doubting the China-made aircraft and its certification.
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