Compensate for not honouring plane deal: China tells Nepal

China has demanded compensation from Nepal for not honouring a USD 27 million deal.

Kathmandu: China has demanded compensation
from Nepal for not honouring a USD 27 million deal struck in
2005 to buy two Chinese-made aircraft for Nepal Army, a media
report said Wednesday.

"China has sought nearly 50 per cent of the total deal
money as compensation," Republica reported.

Quoting a government source, the paper said that a
Chinese delegation that was in Kathmandu last week to resolve
the defunct six-year-old deal asked Nepal during a meeting to
pay compensation for not purchasing two Chinese-made MA 60

The Chinese position led to the meeting ending
inconclusively, the report said.

The Chinese side they dismantled the planes after Nepal
refused to purchase them as per the deal and need to be
compensated for that.

Nepal had ordered the MA-60 turboprop civilian aircraft
from Chinese manufacturer Xian Aircraft Industry Group Co
under the then royal regime in 2005.

But Nepal refused to buy them following the ouster of
the royal government in April 2006 though the twin-engine
aircraft were already built as per the USD 27 million deal.

"The Chinese claim is not acceptable to us. We want to
see China either give us the planes as per the six-year-old
deal or return the deal money," the report quoted a Nepali
source as saying.

The aircraft, initially meant to be purchased for the
Nepal Army under a buy two get one free scheme, is the
original Soviet Antonov An-24 upgraded with Pratt & Whitney
engines and Rockwell avionics.

Although the MA-60 has been exported to Zimbabwe,
Fiji, Eritrea and Congo, it does not have UK or US Federal
Aviation Authority (FAA) certification and has been
decommissioned by China?s own Wuhan Airlines and China Eastern
Airlines, the report said.

The Chinese delegation visited Nepal after the new
government reopened the aircraft purchase deal in March in a
fresh bid to end the deadlock, it said.


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