Over Rs. 4 billion embezzled in jet purchase: Report

Kathmandu, Jan. 2: The Subcommittee formed by the Parliament's Public Accounts Committee (PAC) to study on the procurement of the wide-body aircraft by the Nepal Airlines Corporation (NAC) has concluded that about Rs. 4.355 billion was misappropriated while obtaining the much hyped jet airliner.

Subcommittee Coordinator Rajendra Kumar KC said that the amount of corruption might go up as the aircraft maker company, Airbus, had not send the information about the actual amount it received against the purchase.

The subcommittee submitted the final report to Chairman of the PAC Bharat Shah on Wednesday.

It has recommended taking actions against incumbent Minister for Culture, Tourism and Civil Aviation Rabindra Adhikari, former Tourism Ministers Jitendra Dev and Jiban Bahadur Shahi, Director General of NAC Sugat Ratna Kansakar, chairmen of Board of Directors Prem Kumar Rai, Shankar Adhikari and Krishna Prasad Devkota and all officials who were involved in the procurement process.

"Minister Adhikari has sent the last instalment of the price despite the Office of the Auditor General's conclusion that the aircraft procurement was not according to law. He lied to the House Panel that he consulted informally with the Auditor General Tanka Mani Sharma before making the payment. He colluded with the corrupt officials and hid the truth," said KC.

The report accused former Tourism Minister Shahi for his negligence and inability to stop the procurement deal even though it was against the Public Procurement Act.

Similarly, another Former Tourism Minister Dev had allowed making the payment of the first instalment of 1 million USD.

The NAC has estimated the price of about 118.163 million dollars for a wide-body aircraft but according to the Subcommittee the price of aircraft in 2016 was 88.099 million and as per the price escalation of 2.7699 per cent – set by the NAC management – the new price would be 93.04 million dollars.

"But the US-based supplier AAR Inc.'s had proposed the price of 104.8 million which means that there was a loss of 23.6 million – 11.8 million dollars in each aircraft – to the NAC," conclude the report.

The Public Procurement Monitoring Office has pointed serious lapses in the procurement process.

The subcommittee has recommended suspending Rai, Adhikari, Devkota and Kansakar and initiating process to punish them.

NAC has purchased two Airbus A330-200 aircrafts in June and July last year from the AAR Inc. for around Rs. 24 billion.

Published in The Rising Nepal daily on 3 January 2019.