A bill to separate aviation regulator and service provider reaches HoR

Kathmandu, Apr. 27

Of the two bills registered in the House of Representatives by the government to separate the aviation regulator and service provider, the Nepal Civil Aviation Authority Bill has progressed through the parliamentary process.

On Sunday, the HoR approved the process for registering amendments to the bill. Members of Parliament will now be able to propose amendments, for which they will have a 72-hour window.

However, the Air Services Authority Bill, the second of the two, has not progressed further in the House following its presentation.

The amendment process was approved based on a proposal by the Minister for Culture, Tourism, and Civil Aviation, Badri Prasad Pandey.

The government brought forward the bill to split the current Civil Aviation Authority of Nepal (CAAN) into two separate entities. The bill was originally registered on February 2 this year. This is the second time the government has introduced the bill in the Parliament.

Earlier, in March 2020, the bill had been registered in the National Assembly of the Federal Parliament and was passed in September 2022. However, as it was still under consideration when the tenure of the HoR expired, it became defunct.

There has long been debate over the need to separate the regulatory and service-providing roles in the aviation sector. The International Civil Aviation Organisation (ICAO), through its 2009 Universal Safety Audit Programme, had questioned the dual role of the current authority.

Since then, ICAO has consistently recommended the formation of two distinct bodies. The most recent audit in 2022 also advised separating the regulator from the service provider.

The government had initially brought forward the bill five years ago, citing potential conflicts of interest when both functions are housed within a single authority. Despite the National Assembly passing the bill amidst various pressures, the HoR was unable to move the process forward for a long time.

The bill passed by the Upper House on September 17, 2022, became inactive while still under consideration. Nepal has also remained on the European Union’s aviation safety list, which bars Nepali aviation companies from flying in the European sky for an extended period.

Under the proposed bill, the Authority will act as the regulator. It will have the power to issue, renew, suspend, and revoke certificates for service provider organisations. The governing body of the Authority will include the relevant minister. For daily administrative functions, the government will appoint an official of a rank of at least a First Class Gazetted Officer.

Responding to queries raised during the bill’s discussion, Minister Pandey stated that the bill was brought forward to fulfil the responsibility of separating the regulator and the service provider. He said the bill aimed at making the aviation sector more organised and effective.

He also stated that the decision to separate the regulator and service provider functions was based on the government's annual policies and programmes, various ministry-level studies, and ICAO's safety audit recommendations.

“We are preparing to revise the national aviation policy. We’ve also prepared a draft umbrella act. The process of integrating provisions related to insurance payouts for both international and domestic flights into law has also begun,” he said.

 Published in The Rising Nepal daily on 28 April 2025 (Translated from Narayan Kafle's news on the same topic).