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Govt under pressure to purchase luxurious aircrafts

The Govt is under pressure from China to buy Turboprop aircrafts as part of the $200 mn confessional loan extended by a Chinese bank.

india Updated: Sep 30, 2006 12:51 IST

Nepal's Seven Party Alliance government is under pressure from China to buy two Chinese MA-60 Turboprop aircrafts as part of the $200 million confessional loan extended by Export Import Bank of China (EXIM), according to media reports.

The luxurious aircrafts were ordered by the previous royal government with an advance payment of USD 5 million, according to The Kathmandu Post.

The loan was extended for development purposes and EXIM Bank, the lender, is also in favour of the entire loan money to be utilised for hydropower generation, the daily reported.

An agreement is already underway to spend $120 million of the loan to build 61 MW Upper Trishuli hydropower project.

Following restoration of democracy in April the new government decided to cancel the order and asked China's National Aero-Technology Import and Export Company to return the advance money.

However, the Chinese government in a strong message said the cancellation of the order would seriously affect bilateral ties, according to the paper.

China has conveyed the message through diplomatic channels that the cancellation would mean an insult to it, sources here said.

The aircraft is built with luxurious interiors fit for royal flights. We don't need this type of aircraft, Finance Secretary Bidhyadhar Malik said.

If we are to buy such an aircraft, it should be commercially fit, not for royal visits, he said.

First Published: Sep 30, 2006 12:51 IST