The Ministry of Culture, Tourism and Civil Aviation has stopped the process of bringing a strategic partner for Nepal Airlines Corporation (NAC) it itself had initiated and was later backed by the Finance Ministry.
Minister for Culture, Tourism and Civil Aviation Rabindra Adhikari claimed that the proposal for bringing a strategic partner will not yield right result and said the NAC management will instead be moved forward in a new way.
He said the NAC will be taken into a company model and that company will then bring management or strategic partner. "We will prepare legal framework to take NAC into company model. It will then be converted into a company through due process and the company will take decision on bringing partner," he explained.
Due diligence of NAC and preparation of the necessary legal framework should be done in the beginning to take it into company model. He said the ministry will adopt a fast track approach by conducting a study as following due process for that will take a long time.
NAC staffers have been opposing the plan of bringing a strategic partner or adopting a company model. The trade unions there have been warning the government to not privatize NAC.
Minister Adhikari, however, is adamant that he will take the national flag-carrier to company model at any cost deeming that it cannot compete in the market in the current model. "There will be stake of commoners once it goes into company model and it can do business accordingly," he reasoned.
He added that the issue of government ownership will be decided after preparing legal framework and conducting study.
The government aims to reform public enterprises as far as possible as per the strategy of institutional reform. The process for bringing a strategic partner for NAC was started as per that plan.
Global bids were invited for strategic partner to reform management and boost capacity of NAC when Jeevan Bahadur Shahi was the minister.
Lufthansa Consulting Group of Germany was the only bidder in the tender process. The ministry had studied the proposal and sent it to the Finance Ministry for the latter's opinion. The Finance Ministry had supported the proposal.
