Two bills to split the Civil Aviation Authority of Nepal (CAAN), Nepal’s aviation regulator and service provider, into separate regulatory and service-providing bodies have been registered in the House of Representatives, the lower house of the federal parliament.
Minister for Culture, Tourism and Civil Aviation Khadga Raj Paudel registered the ‘Nepal Air Service Authority Bill, 2083’ and the ‘Nepal Civil Aviation Authority Bill, 2083’ in the House on Ashoj 16 (BS). Paudel stated that once these bills are passed, the regulatory and service-providing functions of air transport will be carried out by separate institutions, thereby ending the existing conflict of interest.
This legislative initiative is expected to help manage air navigation services and airport operation services more effectively, in line with international practices. It is also anticipated to address the flight safety concerns of the International Civil Aviation Organization (ICAO) and the European Union (EU) regarding Nepal’s civil aviation sector.
Background to the split
CAAN was established on December 31, 1998, as a fully government-owned autonomous body, replacing the then Department of Aviation, under the Nepal Civil Aviation Authority Act, 2053 (BS). Since its inception, CAAN has served as both the regulator of civil aviation and the service provider in air navigation services and aerodrome operations.
The dual role of CAAN has been a long-standing concern for international bodies. The ICAO’s Universal Safety Audit Program in 2009 raised questions about the authority’s combined regulatory and service-providing functions. Similarly, the European Union has consistently expressed concerns about Nepal’s air safety as long as the same body acts as both regulator and service provider.
An earlier attempt to split CAAN was made in 2076 (BS) when a similar bill was registered in parliament. However, that bill became inactive after failing to pass through the House of Representatives, despite being approved by the National Assembly, the upper house of parliament. Structural reforms of CAAN have also been a part of the government’s policy and programs for a considerable period.
What happens next
Once the registered bills are passed by both houses of the federal parliament – the House of Representatives and the National Assembly – and authenticated by President Ramchandra Paudel, they will be enacted into law. Under the new legislation, the Nepal Civil Aviation Authority will function solely as the regulatory body, while the construction, operation, and management of airports will fall under the purview of the new Air Service Authority.
The Air Service Authority will also be empowered to contract private sector entities through competitive bidding, with government approval, for the operation and management of airports. Rajkishor Yadav, chairperson of the House of Representatives’ International Relations and Tourism Committee, expressed confidence that the bills would be passed during the current parliamentary session.
However, a definitive timeline for the bills’ passage into law has not been publicly announced. Further details regarding the organizational structure, staff management, and budget allocation for the two new bodies are also yet to be made available. Furthermore, a specific date for Nepal’s potential removal from the European Union’s air safety list, following the bills’ enactment, has not been set.
