Top court seeks government’s response as grounded fleet and alleged losses revive procurement controversy….reports Asian Lite News Desk
Nepal’s Supreme Court has reopened scrutiny of the government’s controversial procurement of six Chinese aircraft after issuing a show-cause notice to several state agencies, seeking an explanation for the deal that has left the state-owned Nepal Airlines Corporation (NAC) saddled with heavy financial losses.
The court’s intervention follows a public interest litigation filed by chartered accountant and public-interest activist Bhesh Raj Luintel, who has sought a comprehensive investigation into the decade-old aircraft acquisition, alleging that the procurement caused billions of rupees in losses to the state.
A single bench of Justice Bal Krishna Dhakal on June 26 directed the Office of the Prime Minister and Council of Ministers, the Commission for the Investigation of Abuse of Authority (CIAA), the Ministries of Finance and Culture, Tourism and Civil Aviation, and Nepal Airlines Corporation to explain why no formal investigation had been launched into the deal. The court has also accorded the case “legal priority”, allowing it to proceed faster than routine cases.
The six Chinese aircraft — four Y12E 17-seater planes and two MA60 56-seater turboprops — were procured between 2014 and 2018 through Chinese grants and concessional loans worth NPR 6.66 billion. The purchase was intended to strengthen Nepal’s domestic aviation network at a time when the national carrier faced a severe shortage of aircraft.
However, the project soon ran into operational and financial difficulties.
Five of the six aircraft have remained grounded at Tribhuvan International Airport in Kathmandu since 2020, steadily depreciating while generating no revenue. The sixth aircraft suffered a runway excursion at Nepalgunj Airport in March 2020 and remains there as scrap after insurance compensation was settled.
Nepal Airlines has repeatedly cited high operating costs, excessive fuel consumption, expensive spare parts and poor commercial viability as reasons for suspending operations of the Chinese-made aircraft.
The carrier has also faced shortages of trained pilots, instructor pilots, maintenance engineers and spare parts, while the aircraft were found to be unsuitable for operations at several of Nepal’s remote airstrips.
The financial burden has continued to mount, with the airline also paying parking charges for the grounded aircraft.
NAC Director Archana Khadka confirmed to IANS that the corporation continues to incur parking costs for the five aircraft stationed at Tribhuvan International Airport.
“I cannot immediately say how much we pay in parking charges,” she said.
Referring to the aircraft damaged in Nepalgunj, Khadka said, “We have received insurance compensation. The aircraft has now remained there in the form of scrap.”
She added that previous attempts by Nepal Airlines to lease out the aircraft had failed after receiving no bids.
“A new leadership team that will soon be installed at NAC is expected to look into the matter,” she said.
The procurement, once projected as a milestone for Nepal’s aviation sector, is now increasingly viewed alongside the Chinese-funded Pokhara International Airport as one of the country’s most controversial infrastructure investments, with critics arguing that both projects have imposed significant financial liabilities without delivering the expected economic returns.
In his petition, Luintel argued that despite widespread public concern and mounting financial losses, the CIAA had failed to initiate an independent investigation into possible irregularities, abuse of authority or corruption linked to the procurement process.
He urged the Supreme Court to issue a writ of mandamus directing the anti-graft agency to conduct a time-bound and impartial investigation covering all officials, decision-makers, consultants and authorities involved in approving and executing the purchase.
The petition also called for corruption cases to be filed if the investigation uncovers evidence of wrongdoing or abuse of office.
Luintel further requested the court to order the disclosure of all procurement-related documents, including feasibility studies, technical evaluations, financial assessments, procurement approvals and official decisions, arguing that these records have remained confidential and have denied the public access to information on a deal that has cost the state billions of rupees.
The Supreme Court’s intervention has once again brought the controversial aircraft acquisition under public scrutiny, raising fresh questions over procurement decisions, accountability and the long-term financial impact of Chinese-funded projects in Nepal.
