Chopper scam thriving despite promised crackdown

Thu, Nov 29, 2018 page4

Chopper scam thriving despite promised crackdown
- AFP, KATHMANDU
Nepal’s pledge to crack down on fraudulent helicopter evacuations has failed to curb the scam, with tourists still being unnecessarily airlifted from the Himalayas so middlemen can profit on the insurance payouts, industry sources say.
An Agence France-Presse investigation earlier this year exposed the chopper racket where dodgy trekking outfits pressure tourists into needless and costly airlifts, or bill multiple times for a single flight (“‘Unnecessary rescues’ soar in Nepal on profits from insurance payouts,” July 1, page 15).
Nepal’s government launched an inquiry in June after insurers were billed more than US$6.5 million for 1,300 helicopter rescues in the first five months of this year.

An unidentified person is carried on a stretcher at the Everest Base Camp near Namche Bazar, Nepal, on April 24.

Photo: AFP

Global insurers threatened to stop covering travelers to Nepal unless the frequency and cost of rescues fell sharply, worrying the nation, which relies heavily on tourism revenue.
However, industry insiders told reporters that the scam was thriving well into the busy autumn trekking season, with operators continuing to make thousands of dollars evacuating tourists months after Nepal promised to rein in operators.

“They [the government] came up with all these ideas, but no one is following it,” said Jay Rana, who acts as an in-country agent for international insurance firms.
Invoices seen by reporters show trekking agencies and charter companies are still overbilling insurers for rescues, collecting kickbacks of between US$500 and US$2,100 per flight.
The four chopper firms involved most frequently in rescues said they carried out 489 airlifts in September and last month, but industry officials said the companies tend to understate the true figure to avoid competition and scrutiny.
An airport source, who requested anonymity, said more than 1,000 chopper airlifts were conducted over the same two-month period — with 68 recorded in a single day late last month.
However, the Nepalese Ministry of Culture, Tourism and Civil Aviation’s Department of Tourism — which started monitoring airlifts in September — said only 40 helicopter rescues had occurred in the two months to this month.
“There is a little bit of a problem with the system in coordinating with the [trekking and helicopter] operators,” department Director-General Dandu Raj Ghimire said, referring to the new rules aimed at curbing the fraudulent rescues.
However, the chopper scam was “not a big problem nowadays,” he said.
Nepal’s trekking industry has become hooked on the kickbacks received from getting tourists evacuated by helicopter, Rana said.
In one instance, a trekking firm refused to share the location of a stricken tourist because Rana refused to pay the agency a hefty commission.
“It was like a hostage situation,” Rana said, adding that the trekker was eventually brought to lower altitude on horseback.
The government has also not taken action against trekking outfits selling the below-cost Himalayan trips, which are at the heart of the chopper scam. The budget outfits bank on making a profit through the commission they receive if a tourist gets airlifted.
Some offer itineraries without acclimatization days factored in, or have guides push tourists to skip their rest days, increasing the risk of altitude sickness and a possible airlift from the mountains.
There are also reports of guides putting baking soda — a laxative — in food to make trekkers ill.
One tourist trekking in the Everest region late last month — who declined to be named — said that her guide advised that rest days were unnecessary. She was evacuated by a helicopter with altitude sickness halfway through her trek.
The government probe has identified 15 firms — including helicopter companies, trekking agencies and hospitals — linked to the racket, but no action has been taken against any of the alleged perpetrators.
“Nothing punitive is happening,” said Suraj Paudel, a Swiss-trained mountain rescue specialist. “We are still doing [the] helicopter business like we are buying goats in the market.”
However, insurance companies are taking note. Since the investigation published in June, many UK-based insurers have hiked premiums or introduced special excess charges for helicopter rescues in Nepal.
Anthony Kaye, of Campbell Irvine Insurance Brokers, described these steps as “a halfway house” and said it was only a matter of time before insurers stopped issuing policies for Nepal.
“There is no commercial reason to maintain cover to Nepal given the sustained losses. The clock is ticking,” he said.
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