The parliamentary inquiry into the purchase of two new aircraft by the Royal Nepal Airlines Corporation (RNAC) took a new turn last week after MPs questioned what exactly the government wanted to do with the airline-privatise it or continue to let it run as it is.

The Public Accounts Committee (PAC) gave the Ministry of Tourism and Civil Aviation 10 days to explain exactly what its policy regarding the privatisation of RNAC's domestic services was and how the ATR purchase would fit in the framework.

The PAC inquiry was triggered by the 11 August decision by the airline to purchase two French-made ATR72-500 aircraft at $16.5 million apiece for its domestic fleet.

The Aviation Policy-revised in late 1999-says that the government would retain 51 percent of RNAC (domestic) ownership and offer the remaining shares to investors, with priority given to private companies already operating air services.

Officials from RNAC and the government who were present at the inquiry made contradictory statements one after another, which even prompted some MPs to ask if the airline and ministry officials ever talked outside the committee room.

Tourism Secretary Barun Prasad Shrestha said his ministry had asked RNAC what it was doing about implementing the Policy some months ago but had not received any response. RNAC Executive Chairman Hari Bhakta Shrestha responded saying that his office had received the letter only two months ago.

The privatisation angle came into debate after Auditor General Bishnu Bahadur K.C. said the fleet expansion could contradict policy if the airline were being privatised.