NAC’s amazing deal: two A330s for the price of one


By Ram Khatry
2 January 2019


There is something strikingly amusing about the purchase of two wide-body planes by Nepal Airlines Corporation (NAC).

Believe it or not, the two A330s were bought for the price of one. To be even more accurate, less than the price of one.

Ek kaa do, ek kaa do, ek kaa do — yell street vendors in the subcontinent trying to push two units of their merchandise for the price of one. The juxtaposition of kerbside sale of made-in-India goodies and the highflying world of aircraft merchants may sound little too far-fetched. But the planes purchased under the leadership of Sugat Ratna Kangsakar were even better than the ingenious ek kaa do sales pitch.

Aircraft industry insider Justin Dubon, the head of Global News at Airbus, recently told southasia.com.au that an A330 usually costs US$238.5 million.

Nepal Airlines-southasia.com.auBut the two A330s NAC bought cost only US$209.6 million – total cost for both of them. This is less than half of the listed price for one, although there are variations depending on engine, capacity and various other factors. Even if NAC had bought planes that had clocked 1000 hours, the price should not have gone down that low.

Mr Dubon would not be tricked into speculating as to why NAC got the two planes so cheap. “All financial details are between the airline and the financiers to disclose,” he said.

It appears NAC secured a rare deal that reduced the total cost of the two wide-body planes by a whopping 56.06 percent. Instead of having to fork with US$477 million (for two planes at the rate of US$238.5 million each), Nepal Airlines Corporation paid only US$209.6 million.

It should have been a matter of celebration that the NAC boss Sugat Ratna Kangasakar could save US$267 million for one of the poorest countries in the world. Instead, the NAC Managing Director is facing the sack from the federal government; a parliamentary subcommittee today recommended his immediate suspension. The sub-committee under Nepal’s Public Accounts Committee (PAC) was formed to look into the suspected corruption behind the strikingly cheap procurement.

But Dr Bharat Raj Poudel, a Brisbane-based media expert who keenly follows the goings-on back home, questioned the reliability of the findings of the parliamentary subcommittee. He remarked that the members of the subcommittee aren’t specialist enough to be able to scientifically probe a complex aircraft deal of this nature. He, however, agreed that the subcommittee has raised valid procedural and moral questions on the procurement process.

“The subcommittee chairman himself said that it is not yet known as to how much money Airbus received from NAC. So, how can it be possible for them to calculate transactions and determine that funds were misappropriated?”, Dr Poudel asked indicating more rigorous and specialist probe is required for getting to the bottom of the A330 saga.

“On top of this fishy deal, some three dozen people purporting to represent the government and NAC visited Air Bus premises. What was the input of their visit after having wasted millions of rupees of the Nepalese tax payers? This in itself is a corruption,” he added.

The PAC subcommittee has concluded that Mr Kangsakar, along with present and past ministers and government secretaries, masterminded the biggest corruption the impoverished nation has ever dealt with.

It put the suspected corruption at NRs 4.3 billion, approximately US$38 million.

A quick study of the Nepali-language “conclusion” of the findings indicates that the subcommittee suspects policies and bylaws of the Nepal Airlines Corporation were subverted in order to create a conducive environment for corruption.

9 thoughts on “NAC’s amazing deal: two A330s for the price of one

  1. Prabhat Lamichhane

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    Have you factored in the fact that NAC was supposed to get a 65% discount but instead the management settled for only 55% discount, and hence the argument that there is a loss of 10% that adds upto to 42.6 Million for the two planes? Without this huge piece to the puzzle factored in, it can be misconstrued as an amazing deal. Would appreciate the clarification / further explanation on this.

  2. Can any one speak anthing without proof. “Suppose” words is not a proof itself. Better produce geniun proof. Tomorrow suppose some one barks there are 80% discount in aircraft deal what you say about your suppose 65%. PAC must able to say the right price of plane before charging any one. If they do not know the right price of the plane Nepal bought then their crying is no use. They are playing in the hands of some unknown airline operators who want NAC to zero crafts.

  3. Seriously, does this guy know what he is talking about?. Airline typically get over 50 percent discount from the list price for new model aircrafts like A350. A330-200 has been flying for around 20+ years now so its value even if its brand new is much less than what NAC paid..

  4. We don’t have even know if the aircrafts were actually purchased or leased. NAC don’t even have proof of ownership. So this article about cost of aircraft can be true and corruption is in even bigger scale if the planes were actually on lease.

  5. The PAC subcommittee has concluded that Mr Kangsakar, along with present and past ministers and government secretaries, masterminded the biggest corruption the impoverished nation has ever dealt with.
    Exactly how corruption is taking place in Nepal these day.

  6. How will you describe the legitimacy of this deal when the deal was made by a company with USD 1 property or the company just registered to close this particular deal only???

  7. Pls try to sale these two wide body aircrafts then you will get clear picture of price.

    It is not good idea to comment any positive or negative due to CIAA Investigation just starting.

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