CAAN unbundling to be concluded by next year

Kathmandu, Aug. 12: The government has said that the unbundling process of the Civil Aviation Authority of Nepal (CAAN) would be completed within the next year.

The national aviation sector regulator will be split into two entities – service provider and regulator.  The service provider unit will manage airports and ground handling, as well as other services, while the regulator will be solely concentrated on regulation.

The CAAN is performing both the roles as the regulator and service provider.

Spokesperson of the Ministry of Culture, Tourism and Civil Aviation (MoCTCA) Ghana Shyam Upadhyaya said that the CAAN would be split within the time frame given by the International Civil Aviation Organisation (ICAO).

The ICAO had asked Nepal to unbundle the CAAN by the end of 2018.

According to Upadhyaya, the implementation of the new Civil Aviation Act will open the split process.

The draft of the act is prepared and is sent to the Ministry of Law for consultation following the endorsement of the CAAN Board of Director.

 The MOCTCA and CAAN had held discussions with the government and private sector stakeholders regarding the unbundling of the aviation sector regulator.

Upadhyaya stated that the process would now be expedited as new minister, Jitendra Dev, has assumed his office.

Assistant Director of CAAN Trilochan Poudel said that the Authority has started internal preparations for the unbundling.

"All the stakeholders have agreed that the split of the CAAN is necessary for better and effective service and regulation as per the international standards," he said.

The Asian Development Bank (ADB) had conducted the study on unbundling the services provided by the CAAN.

CAAN sources said that its employees would be given the opportunity to choose either of the sector when the organisation is split into two entities.