KATHMANDU, DEC 01 - The Employees' Provident Fund (EPF) has put forward 10 conditions including government guarantee to grant loan to Nepal Airline Corporation (NAC) for the purchase of new aircraft.
Administrator of EPF, Ramesh Kumar Bhattarai, said that they had sent a letter to the NAC which says it can grant loan if its 10 conditions are fulfilled.
"We can grant loan on the basis of NAC's financial condition and business plan," said Bhattarai on Tuesday at the Public Account Committee (PAC). "Our intent is of giving loan if all our conditions, including guarantee from government, are met." According to Bhattarai, the EPF board on March 27 had decided that it could provide loan to the NAC as per liquidity situation if their conditions were fulfilled. "But we've not done any agreement regarding this," said Bhattarai.
Chairman of the EPF and Comptroller General Abanindra Kumar Shrestha said they had held discussion with then Tourism Minister Hisila Yami. "Since then, we'd no discussion or correspondence regarding this," said Shrestha. "Without government guarantee, loan can't be granted." The PAC has been investigating the Airbus deal after the NAC management rushed to send the lock-up money. On Tuesday, it summoned officials of the EPF. The NAC has already sent the Air Bus Rs. 57 million as lock-up money but the remaining amount is yet to be managed to buy A320 narrow body and A330 widebody aircraft.
Among the conditions set by the EPF are, the limit of the loan should be up to the level of guarantee the government gives. The government should guarantee both principle and the interest of the loan and if NAC fails to repay the principle amount within the repayment period, the government has to deposit the entire amount. Likewise, the interest rate of the loan should be 10 percent, the NAC or the government should pay the interest on quarterly basis.
