Lawmakers allege ‘commission game’ in NAC wide-body plane purchase deal

Kathmandu, November 25

Lawmakers have suspected that a big ‘commission game’ was played out in Nepal Airlines Corporation’s wide-body aircraft purchase deal.

Speaking at a meeting of the Public Accounts Committee (PAC) of the Federal Parliament today, lawmakers claimed that the concerned government authorities and NAC officials could have been involved in financial irregularities while purchasing the wide-body planes and sought a thorough investigation into the matter.

The first of the two Airbus A330-200 aircraft was delivered to NAC on June 28 and the second plane on July 26. The national flag carrier had purchased the aircraft from US-based AAR Corporation for around Rs 24 billion. NAC had taken a loan of Rs 12 billion each from Citizen Investment Trust and Employees Provident Fund at 10.5 per cent interest rate to buy the planes.

During the meeting, Nepali Congress lawmaker and Chairman of PAC Bharat Kumar Shah, claimed that Rs 6.59 billion could have been embezzled during the purchase of the two wide-body aircraft. Shah presented a document in the meeting today raising questions against government authorities including NAC and the Ministry of Culture, Tourism and Civil Aviation (MoCTCA).

As per him, more than 25 per cent of the Rs 24 billion that was spent to buy the planes could have been embezzled.

Moreover, Prem Ale, Nepal Communist Party (NCP) lawmaker and member of PAC, also accused the NAC of mismanagement. He added that if the current situation persists then NAC could soon go bankrupt. “The management at NAC has failed to come up with any concrete plan to expand its services globally.”

Meanwhile, Krishna Prasad Devkota, secretary at MoCTCA, assured the committee that the ministry was ready to help PAC

in its investigation of the purchase deal. “If there was any corruption in the deal I will take the responsibility for it and I am ready to facilitate PAC in any further investigation,” he added.

Meanwhile, Minendra Rijal, Nepali Congress lawmaker and member of PAC, also alleged there had been irregularities in purchase of the wide-body aircraft. “The media and public have been raising questions regarding the deal every day and PAC would like everybody concerned with the deal to clarify the issue.”

He urged NAC to provide answers to all the queries that have been raised about the aircraft purchase deal.

The issue about money being embezzled during the deal came to light when the 55th Annual Report of the Office of Auditor General pointed out that NAC had not followed the proper legal procedure to buy the two aircraft. The report has mentioned that NAC had used an agent to buy the planes instead of directly bidding from the aircraft manufacturing company.

However, Sugat Ratna Kansakar, managing director of NAC, has said that there are no legal, warranty, ownership or technical support issues and the corporation has all the documents related to those issues.