The Hindu Business Line : Nepal begins privatising Royal Nepal Airlines

The Nepal government, after restoring permanent peace in the country by signing an agreement with the Maoists, has now initiated the process to fully re-engineer (read as privatise) Royal Nepal Airlines, which is fully government-owned.

This is said to be in accordance with one of the principal terms of agreement with the rebels on the "inevitability of privatisation, allowing FDI in almost all sectors of national development". Investment from India is particularly sought in sectors like agro-forestry, manufacturing, construction, hotel projects and infrastructure development, particularly in development of hydro-electric projects, an area with enormous potential in Nepal.

Speaking at an interactive session organised by CII, eastern region, Dr Govind Prasad Kusum, Consul General of Nepal in Kolkata, said the situation in Nepal has undergone a 180 degree change, and 100 per cent equity investment, with full repatriation, by foreign entrepreneurs was now allowed.

More flights

Admitting that there was need for more India-Nepal flights from different places in India, he said a committee would be appointed soon to expedite the privatisation process, which will involve liquidation proceedings, share transfer etc. Once Nepal Airlines becomes a full-fledged corporate entity, it will expand operations with more flights from India, he clarified.

Pointing out that the first priority of the interim government now was to fully institutionalise the peace process and restore democracy fully, he said talks with Delhi have already begun to seek more flights to Kathmandu from India to give Nepal tourism a major leg up.

Consultations with many of the private airlines in India such as Jet Airways and Sahara have also begun to get more flights out of Kolkata to Kathmandu, it is learnt. Nepal, with a population of 5 million, received nearly 3 lakh tourists last year, out of which some 80,000 (25 per cent of this from Kolkata alone) were from India, and this is set to increase substantially this year.

Nepal's SPA (Seven Party Alliance) on November 21, 2006, signed a complete peace agreement with the Maoists, involving the key issues of ceasefire, end of war, arms arrangement (under supervision of UN officials), Role of Nepali Army, advancement of human/fundamental rights, and most importantly, not to disturb the industrial environment.

Strengthening trade

Dr Kusum said total peace has been restored in Nepal, and the industrial investment climate will soon be made fully conducive for foreign entrepreneurs. Trade with India, governed by the Indo-Nepal treaty of 1991 and the Transit Trade Treaty of 1999, will be further strengthened, he added. Nepal now has a huge deficit trade with India, as virtually everything, from needles to aircraft, was now being imported from India.

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