KATHMANDU: The government is preparing to split the Civil Aviation Authority of Nepal (CAAN) into two separate entities: one for regulation and one for service provision. This move has sparked concerns among stakeholders in the aviation sector.
On March 15, 2020, then-Minister for Culture, Tourism, and Civil Aviation, Yogesh Bhattarai, presented two bills in the National Assembly aimed at splitting CAAN.
The first bill was the Bill to Amend and Consolidate the Law Relating to the Civil Aviation Authority of Nepal, and the second was the Bill to Establish and Manage the Nepal Air Services Authority.
A general discussion on both bills took place in the National Assembly on March 16, 2020. Afterward, the bills were sent to the concerned committee on May 13, 2020, for clause-by-clause review.
Following the committee’s report on July 7, 2021, the National Assembly passed both bills on August 2, and they were sent to the House of Representatives. However, with the term of the House of Representatives ending on September 17, 2022, the bills became inactive.
Now, the Nepali Congress-CPN-UML coalition government is preparing to introduce a new bill in parliament to split CAAN into two authorities.
Speaking at an interaction on the “Future of the Civil Aviation Authority of Nepal” organized by the Institute for Strategic and Socio-Economic Research (ISSR) at Pavilion Hall in Kathmandu on Friday, Nepali Congress (NC) parliamentarian Ramhari Khatiwada explained, “The bill has not been moved forward only because the tourism minister was abroad. Now that the minister has returned, the bill can be brought to parliament.”
As the government prepares to present the bill, the opposition Rastriya Swatantra Party (RSP) plans to consult experts on Monday to discuss the issue at the party level.
Meanwhile, the official trade union of CAAN employees has announced a protest, arguing that dividing CAAN into two separate authorities—one for regulation and the other for service provision—will weaken the institution further. The union is calling for the withdrawal of the bill.
Stakeholders’ Views on the Split
Senior Captain Bijay Lama of Nepal Airlines Corporation (NAC) expressed concern about Nepal’s continued blacklisting by the EU, questioning whether the country’s silence on the issue is contributing to the problem.
Lama noted that despite receiving a score of 70.1 percent in the EU’s audit, Nepal is still blacklisted, while other countries with lower scores are not.
He pointed out that countries like Italy and France, which are also under EU regulations, have a single regulatory body. The EU’s audit did not suggest that Nepal’s regulatory body should be split.
Manoj Karki, Managing Director of Summit Air, suggested that responsibility for regulating airspace should be transferred to the Ministry of Physical Infrastructure and Transport, arguing that it is inappropriate for the Ministry of Culture, Tourism, and Civil Aviation to oversee this. Karki emphasized that the purpose of CAAN should be clarified before any split.
He also expressed concerns about how the split might impact foreign pilots’ licenses, noting the uncertainty around how current challenges will be addressed.
RSP parliamentarian Sobita Gautam stated that Nepal cannot simply blame the EU for its aviation issues. She highlighted that most of the recent aviation accidents in Nepal have been due to weaknesses in the regulatory body.
Gautam questioned the effectiveness of a single body in a country like Nepal, which lacks professional aviation practices. She stressed that air safety should be the top priority and argued that if the regulatory body had performed adequately, the issue of privatization and division would not have arisen.
Member of the House of Representatives, Prabhu Sah, opposed expanding state structures and instead called for the reduction of institutions.
He questioned whether creating two separate authorities would reduce accidents or improve aviation safety in Nepal, noting that the European Union had already blacklisted the country.
“My suggestion is that the Authority should be centralized and strengthened,” Sah stated, adding, “Will building a new structure reduce accidents? What interest is being served here?”
MP Sah, who is also the chairman of the Aam Janata Party, emphasized that Nepal should engage in dialogue with the European Union regarding the blacklisting issue, as it affects Nepal’s pride and economic interests. Sah also opined that the government should withdraw the bill to divide CAAN.
Hari Odari, Joint Secretary at the Ministry of Foreign Affairs, who participated in the discussion, noted that the International Civil Aviation Organization (ICAO) audit had assigned Nepal the lowest scores of 42 for air safety and 46 for the air safety system.
Odari added that about 150 countries have two regulatory bodies, while 50 countries operate with one. He argued that the effectiveness of both models is the same and expressed his personal view that the EU did not request the creation of two authorities.
Ramhari Khatiwada, Chairman of the State Affairs and Good Governance Committee in the House of Representatives, stated that he saw no justification for splitting CAAN into two entities.
He sarcastically pointed out that while Nepal remains on the blacklist, the Tourism Minister has received an award from Europe.
Khatiwada, also a Nepali Congress leader and parliamentarian, emphasized the need for appropriate laws but expressed doubt that splitting CAAN would lead to further development in tourism, aviation, or other sectors.
He further clarified that, while a minister from his own party plans to introduce a bill to split CAAN, he would not support it.
Former Chief Secretary Shankar Das Bairagi commented that the aviation sector is closely tied to national security and should be taken very seriously. He called for more in-depth discussions among lawmakers when drafting laws concerning aviation.
Program chair and former Chief Justice Kalyan Shrestha said that aviation security should be the top priority and that a debate is needed on how to implement it effectively.
He fundamentally disagreed with the idea of splitting CAAN because of the EU’s concerns, stressing that it is Nepal’s responsibility to decide on such matters.
“It is not that an organization becomes stronger by dividing it; it becomes stronger through consolidation. This can be achieved through either integration or division,” Shrestha stated. “It is also possible to create a regulatory and service provider department, but I do not support working according to my own regulations.”
Shrestha concluded by emphasizing the importance of air safety, saying, “If air safety cannot be guaranteed, the plane will not fly.”
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