Monday, March 13, 2017

NATTA flays CAAN's decision to distribute bonus

Nepal Association of Tour and Travel Agents (NATTA) – the umbrella association of Nepali travel agents and tour operators – has opposed the decision of Civil Aviation Authority of Nepal (CAAN) to distribute bonus to its staffers.
Issuing a statement, NATTA has said that the decision taken by former tourism minister Jeevan Bahadur Shahi was against CAAN Act 1996, Bonus Act 1973 and Bonus Rules 1982.
The decision has thrown cold water on our hope that CAAN would spend the money collected from air passengers to expand existing airports and develop infrastructure of Tribhuvan International Airport (TIA), NATTA said in its press note.
The CAAN currently collects taxes in two separate baskets. The government has authorised the CAAN to raise Rs 1,000 per passenger in airport development tax, which comes to Rs 1.70 billion annually.
In April 2013, the CAAN board authorised collection of development tax from the travellers departing from TIA to raise funds to repay its loans and finance ongoing improvement projects for a period of five years. The CAAN is authorised to spend this amount solely on development of airport infrastructure.
In addition, the CAAN collects another Rs 1,130 as passenger service charge from each international traveler, which amounts to Rs 1.80 billion a year.
However, CAAN is in the process of being split into two separate entities – service provider and regulator – which will require additional funding. It has also been upgrading Tribhuvan International Airport (TIA) by acquiring a loan of $70 million from the Asian Development Bank (ADB), despite collecting millions of rupees from passengers to develop airport infrastructure.
How can the regulator that is also under debt distribute bonus is not only legal but ethical issue, the tourism sector said. "CAAN's regulation also forbids bonus distribution, if safety is compromised."
The decision to extend bonus comes at a time when the efficiency of Nepal’s aviation sector, including its human resources, has been widely questioned at national and international forums for lack of investment and training facilities. Nepal has been put in the bad books for the worst record of air safety oversight since 2009 by the UN aviation watchdog. The European Commission has also included Nepal in its air safety list for poor safety record in 2013.
NATTA has also reminded that the European Union (EU) and International Civil Aviation Organisation (ICAO) have kept Nepali Airlines in blacklist as CAAN has not upgraded infrastructure of TIA and improved safety standards at Nepal's only international airport.
The decision has paved way for CAAN to distribute Rs 159 million to its 800 staffers. Each staff will get an average of Rs 199,062.
Meanwhile, the anti-graft body has started begin investigation on the matter.
Commission for the Investigation of Abuse of Authority (CIAA) has formally launched an investigation into the decision of CAAN to distribute bonus to its employees from money collected from passengers to develop airport infrastructure.
"We have seized necessary documents from the Tourism Ministry today over the decision to distribute bonus to CAAN employees,” said spokesperson of the CIAA Jib Raj Koirala
Though, the tourism ministry officials had recommended that distribution of bonus from money collected from taxpayers for development of airport infrastructure was not appropriate, the outgoing tourism minister Shahi had approved the decision to dole out bonuses. The tourism minister chairs the CAAN board.
The CAAN had decided to distribute Rs 530 million as bonus to its employees from profits earned during fiscal years 2011-12 to 2014-15.
Although the Bonus Act 1974 paves the way for organisations like the CAAN to distribute bonus from their profit, the Bonus Regulation 1983 forbids not-for-profit government-owned entities established to promote administrative, industrial, agriculture and other sectors from extending bonuses. The CAAN – as a regulator of the country's aviation sector – has been set up with the objective of ensuring safety, security and efficiency in the aviation sector. 

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