Kathmandu, January 24
The Ministry of Finance (MoF) has ‘conditionally’ agreed to make German-based Lufthansa Consulting Group as the strategic management partner of Nepal Airlines Corporation (NAC).
Agreeing principally on the proposal of the Ministry of Culture, Tourism and Civil Aviation (MoCTCA) to make Lufthansa NAC’s strategic partner, MoF has said that the strategic hiring process should comply with the existing laws.
MoF’s condition, however, has put the likelihood of Lufthansa being appointed as NAC’s strategic partner in limbo as the process of hiring a strategic partner for NAC has repeatedly drawn criticism in the past.
Earlier, MoCTCA had sought closed request for proposals (RfPs) from airlines of only five countries (United States, the United Kingdom, France, Germany and Australia) through their embassies in Nepal, raising eyebrows as to why the RfPs were not more encompassing.
Moreover, MoCTCA has also been charged of not following the competitive bidding process in hiring the strategic partner for NAC as mandated by the Public Procurement Act.
“If MoCTCA is to hire Lufthansa as the strategic partner for the national flag carrier, it should assure that the hiring process has not been breached,” said Ganesh Prasad Panday, joint secretary at the Corporation Coordination Division of MoF.
MoCTCA officials had said earlier that the government could seal the deal directly with Lufthansa as the government had sought RfPs directly via embassies, and hence, the Public Procurement Act would not apply to this deal.
The sole company to submit the RfP to partner with NAC back in 2015, Lufthansa had proposed to cater its services to NAC in three different phases.
The German firm had proposed to conduct financial due diligence, functional assessment and market potential analysis of NAC within the first four weeks of partnering with NAC at $2,350,000.
In the second phase, Lufthansa had proposed to assess general management, commercial operation, including technical and financial assessment of NAC, within the first five months of becoming NAC’s strategic partner.
In the third phase, Lufthansa had stated it would appoint its officials to top management post of NAC for three years and hand over NAC’s management to NAC within five years.
Lufthansa had sought $3,225,000 for the second and third phase services as NAC’s strategic partner.
However, this financial proposal of Lufthansa is sure to add financial burden on NAC as the corporation would have to pay a staggering $5,575,000 (over Rs 570 million as per today’s exchange rate of Rs 102.34) to the German firm for its strategic consultancy service.
Meanwhile, Maheshwor Neupane, secretary at MoCTCA, expressed his commitment that the process of hiring a strategic partner for NOC would comply with the existing laws.
Informing that MoCTCA will soon seek legal advice from the Ministry of Law, Justice, Constituent Assembly and Parliamentary Affairs and the Nepal Law Commission on the adopted process of hiring strategic partner for NAC, Neupane said, “Lufthansa will be hired as NAC’s strategic partner only if the adopted recruitment process is as per the law.”
He also stated that a strategic partnership at NAC is a must to enhance the performance of the national flag carrier.
A version of this article appears in print on January 25, 2018 of The Himalayan Times.
The number of coronavirus patients has been increasing over the past few days in Nepal. In the current scenario, it seems like the numbers would further increase in the coming days. Given that healthcare workers and frontline staff are the first responders to manage the ongoing pandemic with limited Read More...
GAIGHAT: Police have registered cases against two youths who were arrested on Tuesday for violating lockdown in Udayapur district. The arrested have been identified as Surendra Gupta and Rakesh Sah, both in their 30s. Lalpatta-based police post arrested the duo after they were found bringing t Read More...
NEPALGUNJ: Armed Police Force personnel recovered two abandoned muzzle-loader guns in Kohalpur Municipality-8 in Banke district, today. Deputy Superintendent of Police (DSP) Shyam Kumar Karki said that they recovered the weapons along with ammunition, shrapnel shells, and other items under Sikta Read More...
RAUTAHAT: Tensions ran high at Katahariya Municipality in Rautahat district after police opened a dozen rounds of blank fire to take situation under control as the locals protested against setting up a quarantine in the area and clashed with security forces, on Thursday. At least six police perso Read More...
KATHMANDU: The government is all set to add 1,300-MW electricity to the national power grid of the country within the next fiscal year. A goal has been set to complete all the ongoing hydropower projects and expedite the under-construction projects in the country. The government is planning to Read More...
KATHMANDU: Finance Minister Yubaraj Khatiwada has appropriated a budget of Rs 6 billion for cornonavirus pandemic prevention and control measures. The said budget has been allocated for drugs, medical equipment and other treatment materials required for Covid-19 response. The quarantine facilitie Read More...
KATHMANDU: Cottage and small industries affected by Covid-19 will be provided loans at five per cent interest rate by the government. Finance Minister Yubaraj Khatiwada at the unveiling of the budget for the fiscal year 2020/21 at the joint meeting of the federal parliament shared that a separate Read More...