By CK Khanal, Kathmandu, Jan. 29: After Madan Kharel resigned from the post of executive chairman of Nepal Airlines Corporation (NAC), the government has been making preparations for the appointment of the top official in the corporation that is deep in debts.

Talking to The Rising Nepal, Minister for Culture, Tourism and Civil Aviation Yogesh Bhattarai said that the government was very serious about upgrading the national flag carrier from its current status.

 “We are searching for a capable person to lead the NAC and carry out effective reforms for the improvement of the corporation,” Minister Bhattarai said. “The NAC will get new and capable management very soon.”

The government-owned airlines operator has reached almost the edge of bankruptcy after failing to generate revenue from the operation of new aircraft purchased by taking loans. Currently, the NAC has loans worth around Rs. 37 billion taken from the Employees Provident Fund (EPF) and Citizens Investment Trust (CIT).

In lack of effective operation plan of its aircraft, the corporation had failed to pay three installments of the wide-body aircraft to the EPF and CIT.

Minister Bhattarai, who has been seeking extensive reforms in NAC right from the day of his appointment as tourism minister, said that the government would provide terms of reference (ToR) to the new management chief to carry out reform works in the corporation.

He said that the reform works in the corporation would be performed by considering the recommendations of various study teams formed earlier as well as the recommendations of the parliamentary committees.

With the plan to carry out reforms in NAC, Minister Bhattarai had also formed a study team led by former tourism secretary Sushil Ghimire immediately after his appointment as minister.

The Ghimire-led probe team has suggested bringing in a foreign partner in management and restructuring its loan for the revival of the corporation.

The study committee has recommended restructuring loans of NAC taken from EPF and CIT which had provided the loans at the rate on 10.5 per cent interest. The committee has recommended reducing the interest rate to 6 to 7 per cent.

Similarly, a sub-committee of International Relations Committee of the parliament has made recommendations for structural changes on the board of the corporation.

The sub-committee has recommended picking at least 50 per cent board members of NAC from NAC staffers.

The sub-committee has also suggested inviting a strategic partner for at least 10 years or hiring a foreign expert team in the management. The parliamentary committee has also put forth the option of strategic partnership with renowned international airlines.

Buddhi Sagar Lamichhane, joint secretary at the Ministry of Culture, Tourism and Civil Aviation and one of the board directors of NAC, said that the ministry was in a calm situation for the preparation to bring a storm of reforms at the NAC.

He said that the board of NAC would be active to make reforms in the corporation after the appointment of a new managing director.

Archana Khadka, spokesperson of NAC, said that revenue generation and cash flow of the corporation had improved in recent months as it had managed more of its flights.