July 05, Kathmandu.
As announced in the budget of the current fiscal year, a debate has been started to bring in a strategic partner in the Nepal Airlines Corporation. The Government of Nepal had demanded the leadership of the corporation to run the corporation in the company model in the form of necessary management letter regulations.
Accordingly, the management of the corporation has provided the structure to the ministry. At the same time, the general manager of the corporation, Deemprakash Poudel, said that a debate has started on bringing strategic partners into the corporation.
"We have submitted the proposed draft of the management letter to the ministry," he told Online News.
More than a dozen committees have studied and submitted reports on the management reform of the corporation. After studying the reports, the then Minister for Tourism Yogesh Bhattarai formed a committee under the chairmanship of Sushil Ghimire in September 2008.
The current general manager of the corporation was also a member of this committee. General Manager Poudel informed that the rules of procedure of the management letter have been prepared and submitted to the government based on the suggestions given by this committee. According to him, it has been proposed to bring in strategic partners in the corporation and for that purpose, the government will have a majority share.
General Manager Poudel said that the proposal was made in the regulations based on the suggestions given by the committee earlier. Earlier, the suggestion committee had proposed an investment structure with a 51 percent share of the Government of Nepal (Employees Provident Fund, Citizens Investment Fund, Social Security Fund, Nepal Telecom, Insurance Group and other interested and capable public institutions).
The committee had suggested increasing the authorized capital of the company to Rs 200 billion and invest it in foreign partners or Nepali investors, current and land employees of Nepal Airlines, civil servants, tourism entrepreneurs and organizations and general investors. General Manager Poudel informed that the proposal of the ministry has been made by the corporation by incorporating the suggestions of this committee.
What does the forthcoming budget say?
The budget of the coming Fiscal Year 2078/79 has mentioned that Nepal Airlines Corporation will be restructured and made commercial and competitive. For that, the process of attracting strategic partners through open competition will be started. The share capital structure of the corporation will be increased by changing it.
What happens now
According to General Manager Poudel, as soon as the government sent the draft regulations in the proposal as demanded, the government will now hold a wide-ranging discussion on the proposal. Many modalities that can bring strategic partnership are discussed and a concrete proposal is made.
He says, "The decision of the government of Nepal is universal for the corporation." However, he clarified that there is no decision to take the corporation to the company model or to privatize the corporation.
Employees are agitating
Employees of the corporation have become agitated after the corporation submitted a proposal on a strategic partnership to the ministry. They have demanded that the corporation should not be taken to the company model and the corporation should be maintained as a public institution. Accordingly, the employees have locked the offices of the general manager and directors of the corporation since last Friday.
Spokesperson of the corporation Karishma Shrestha informed that there is a demand of the employees to maintain the corporation in the existence of the public corporation.
She said, "The existence of the corporation as a public enterprise cannot be erased, the corporation must be saved and there is a demand from the employees to discuss several options while restructuring its structure." Accordingly, the atmosphere of dialogue is being created, she said.
General Manager Dimprakash Poudel's explanation about the latest process
According to the Government of Nepal's commitment to improve the organization of the Nepal Airlines Corporation through the budget, the Board of Directors has formed a sub-committee and prepared a strategic partner. The inclusive structure has been submitted to the Ministry.
This is not a decision to move to a company model and this is not a decision to privatize the corporation. The board of directors has not made any decision. Since the decisions of the Board of Directors are always subject to the decisions of the Government of Nepal, the decisions of the Government of Nepal are universal for the Corporation.
Since many of my friends are curious about my personal opinion, I have found it necessary to clarify the matter. In my opinion, the corporation cannot run in the same way as it is now. Among the many options, the company model is still the most popular model in the world.
However, one should not go for the company model in any hand with low capital and excessive loans like now. First you have to repay the loan, you have to add assets, you have to make enough share capital. You just have to be more discriminating with the help you render toward other people. For the development of Nepali labor skills and qualifications, a strategic partnership should be formed with a reputed foreign airline in the first few years. Let's give a realistic explanation, let's stop making fun of the institution, ministry and government by giving a favorable explanation.
