KATHMANDU, Nov 21 - Ameco, a Beijing based company, has demanded compensation of US$ 11 million (nearly 700 million rupees) from Nepal Airlines Corporation (NAC) for suspending the engine overhaul deal.
NAC, following a Supreme Court stay order, had issued notification to Ameco to halt overhauling work on its Boeing-757 engines last week.
"In a letter received today, the company has claimed compensation of US$ two million for spares parts that it had already ordered for both engines. Likewise, it has demanded US$ 9 million for slots occupied," said a senior official at NAC. He said the company has warned that the case may lead it to approach the highest court in China.
Last month, the troubled carrier awarded a contract for overhauling two Boeing-757 engines -- one lying in Hong Kong and another in Brunei. The company has said it has already dismantled one engine, transporting it from Hong Kong, and has already paid in advance in order to uplift the other one from Brunei.
NAC had sealed the deal through a decision of the Managing Director, for which he claimed special authority under NAC regulations. It had drawn flak and caused controversy.
The company was the sole participan in the bidding. The deal was expected to cost over US$ 70 million.
Showing interest in bidding Iberia, a Spain-based company had asked the corporation to extend the deadline, stating that a week's period was too short for participation.
The NAC management left its engine lying in Hong Kong for over a year and a half without any overhauling, and wasting time in an effort to fulfill its vested 'interest'. Around four months ago, it cancelled the tender process for overhauling the engine, a process in which its evaluation team had selected Iberia for the deal. As a result, one of its Boeing-757 aircraft that completed a c-check in Brunei on September 20 has remained grounded to date.
In addition, NAC is going to suspend all its international flights for nearly two weeks from December 18 as its sole Boeing currently in operation will leave for a c-check in Brunei.
