Kathmandu, August 9

Nepali Army is once again trying to seek government permission to engage in profit-making commercial activities, drawing criticism from former army officials and civil society members who say the institution created to protect and defend Nepal should not veer away from its primary responsibility.

The permission is being sought at a time when many are criticising the government for roping in Nepali Army in construction of projects such as Kathmandu-Tarai Expressway where the private sector has experience and expertise.

“There are some good commercial projects in which we want to invest. But the law has barred us from making those investments,” head of the Legal Department of Nepali Army Major General Ratna Prakash Thapa told mediapersons today. “We have, thus, asked the government to amend the Army Act.”

Nepali Army is looking for opportunities to engage in profit-making business activities, as it has a whopping Rs 44 billion — almost 11 per cent of the federal government’s capital budget for this fiscal — in its welfare fund. Of this amount, Rs 38.6 billion is in the form of cash and around Rs 5.6 billion has been invested in different sectors as per the provisions in the welfare regulation.

Nepali Army generated these savings primarily from levy imposed on officials who take part in United Nations peacekeeping missions, interest earned from money parked at banks, and fees collected from its medical college, schools and a university.

“We want to invest this money in income-generating sectors,” said Thapa, justifying the need to amend the Army Act. “We have thus recommended that the revised act include a provision which makes it mandatory for Nepali Army to get the government’s approval before investing in any project.”

The Ministry of Defence, the parent body of Nepali Army, has said it is yet to receive a formal request for law amendment from Nepali Army. “We will first look into it before taking any decision,” Babu Ram Gautam, the spokesperson for the ministry, said.

This is not the first time Nepali Army has tried to convince the government to let it venture into commercial activities. In mid-2000, it had sought permission to operate a bank. It is currently trying to transform a portion of the hospital located in New Road, the heart of Kathmandu, into a commercial complex. It has also shown interest to build Bhimdang Hydropower Project in Manang and Dudhkhola Hydropower Project in Solukhumbu.

“Nepali Army should not be allowed to invest in areas where the private sector is capable. If it wants to generate profit it should engage in areas in which the private sector is denied entry. One such area could be providing special training to foreign troops,” said former finance secretary Rameshor Khanal, adding, “It should, however, be allowed to generate income to provide education and health services to families of its personnel. But it should never be allowed to misuse national resources.”

Security expert and former brigadier general Prem Singh Basnyat said army was becoming profit oriented because of the government’s lax attitude. “The army would have never sought permission to engage in commercial activities had the government allocated adequate budget to provide quality education and healthcare services to family members of army personnel,” said Basnyat.