MoICS officials pointed out another government decision i.e., the proposed splitting of the Civil Aviation Authority of Nepal (CAAN) into two separate entities as service provider and regulator. The government is now preparing to introduce two bills—The Civil Aviation Authority of Nepal Bill and the Air Service Authority of Nepal Bill—to separate the CAAN into two entities. The main reason behind the planned split of CAAN is to remove the situation of conflict of interest and it has been considered vital to ensure the removal of Nepal from the European Commission’s air safety list.
MoICS officials also point out the risk of conflict of interest if Nepal Transit and Warehousing Company Limited is also handed over the task of NITDB. Nepal Transit and Warehousing Company Limited currently provides warehousing, clearing and forwarding, and undertaking services. The company provides warehousing facilities at important transit points such as Raxaul in India and Birgunj, Tribhuvan International Airport, and Gautam Buddha International Airport in Nepal for exports and imports in transit to and from third countries. It also provides clearing and forwarding services to Nepali cargoes—in-transit through Indian customs. The company provides a guarantee-undertaking service for the import cargo of Nepal and government-owned undertakings. The major functions of NITDB are to develop and operate terminals for the import and export of goods, enter into agreements with selected companies for the operation of terminal services, and evaluate and monitor terminal management contracts. “In fact, the board is responsible for regulating the task of Nepal Transit and Warehousing Company Limited,” said a senior MoICS official. “Handing over the task of NITDB to the company means the company will have a dual role as a regulator and a service provider which will invite conflict of interest.” The government has clarified that its decision is aimed at implementing the recommendation of the Public Expenditure Review Commission 2018. The commission headed by economist Dilliraj Khanal had also suggested merging the board with the company. The government had long resisted to implement the recommendation of the commission. But the present-day financial realities forced the government to reconsider measures related to reducing expenditures. However, a former joint secretary of MoICS said that even though the government's move to cut costs was a welcome step, it should have considered whether it would lead to a conflict of interest. “The government should have looked at this issue from the example of the current efforts to split the CAAN,” he said.
