Kathmandu, October 5
Minister for Culture, Tourism and Civil Aviation Khadak Raj Paudel has said the government is holding the necessary consultations on reviewing the interest rates on loans to manage the financial liabilities of Nepal Airlines Corporation.
Speaking at a meeting of the House of Representatives’ International Relations and Tourism Committee on Monday, Minister Paudel said the corporation’s loans from two large financial institutions cannot be called unmanageable. He said talks are moving forward with the prime minister and the finance minister to facilitate a solution.
At the committee meeting, he said policy-level efforts are under way to make the interest rates and instalment payment process more practical on the loans taken from the Employees’ Provident Fund and the Citizen Investment Trust.
Both institutions hold the savings of the general public and employees, so the government has a duty to find a balanced way out that does not put their investments at risk, he said.
Minister Paudel claimed that the corporation’s present liabilities, worth about Rs 50–56 billion, are not at an impossible or “unmanageable” level for an institution with a large brand and assets such as the national flag carrier.
“Nepal Airlines Corporation is not a profit-oriented institution, but it needs to be made financially capable and orderly. The corporation’s main problem is related to the management of its present loans and interest rates,” he said. “Discussions are under way on the government’s side to review the interest rates on the loans taken from the Employees’ Provident Fund and the Citizen Investment Trust. Talks are also taking place with the prime minister and finance minister on this matter.”
Minister Paudel said he believes that if the loan interest rates can be modified somewhat, the corporation can make further progress by using internal resources or alternatives.
He said that if funds are not enough to buy new aircraft immediately, the corporation can operate them on lease, or increase income by making the flight schedules of existing aircraft more scientific.
“If we can ease the loan restructuring and interest rates somewhat, the corporation’s cash flow will improve. After that, it looks possible to run the corporation more effectively by improving aircraft purchase, leasing and flight management,” he said.
He told the committee that inter-ministry coordination has been stepped up to free the corporation from crisis, since it is a public body with a national responsibility rather than just a profit-seeking one.
