PAC panel finds faults in NAC aircraft deal

Kathmandu, December 30

A sub-committee under the Public Accounts Committee of the Federal Parliament has found irregularities in Nepal Airlines Corporation’s deal to purchase two Airbus 330-200 series wide-body aircraft.

The sub-committee has found that the NAC board did not properly follow the Public Procurement Act and bought planes that did not match the weight specified in the initial request for proposal.

The PAC had formed a seven-member panel on December 13 with lawmaker Rajendra KC as its coordinator to probe possible anomalies in the wide-body aircraft procurement process.

The sub-committee stated that thorough investigation was conducted into the issue. “We have found many irregularities related to the plane purchase, payment process and establishment of a fake company,” KC told THT.

“We also looked into why NAC amended its procurement guidelines and included a provision whereby it would purchase only Airbus aircraft.”

According to KC, the committee found that the NAC board had purposefully decreased the maximum takeoff weight to 230 tonnes from 242 tonnes in RfP. “Just in this weight issue we have found irregularity worth Rs 940 million.”

PAC Chairman Bharat Kumar Sah has accused Civil Aviation Authority of Nepal of not monitoring the specifications while inspecting the planes in the factory and when they arrived at Tribhuvan International Airport. “We directed CAAN today morning to provide the exact specifications of the planes as per the RfP within 24 hours.”

According to Sah, both CAAN and NAC had provided incomplete documents to the committee. “On Friday, we sent a letter to NAC to provide necessary details of the wide-body purchase agreement and they submitted the document this morning. It is different from the initial RfP document.”

According to Sah, the committee will make its report public soon and take necessary decisions based on its findings.

Earlier, the Public Procurement Monitoring Office and the Office of the Auditor General had mentioned that NAC exploited loopholes in the Public Procurement Act and the corporation’s bylaws while acquiring the wide-body aircraft. PAC had mandated the sub-committee to investigate the issue and prepare the report on the basis of the findings of PPMO and OAG.

The PPMO recently outlined a number of faults in the aircraft purchase deal, including that NAC purchased the aircraft without conforming to the provisions of the Public Procurement Act.

Interestingly, on December 26, Auditor General Tanka Mani Sharma said he neither met Minister for Culture, Tourism and Civil Aviation Rabindra Adhikari nor advised him on the procurement of the two wide-body aircraft for Nepal Airlines. Sharma’s comments came a day after Adhikari told lawmakers investigating allegations of corruption during the procurement that Sharma had given his nod to the wide-body aircraft purchasing process.

But Sharma has refuted Adhikari’s claim. “I never told him anything about the purchase deal,” he said during a PAC meeting, adding that he neither visited the minister’s office nor gave him any opinion on the procurement process.

Meanwhile, NAC defended its decision stating that it had duly followed the laws while procuring the two aircraft.