Minister sides with blacklisted Spanish firm in row with CAAN chief

Published On: September 17, 2017 02:00 AM NPT By: Sagar Ghimire


Move likely to jeopardise Rs 6 billion compensation claim over stalled TIA upgrade project

KATHMANDU, Sept 16: Minister of Culture, Tourism and Civil Aviation, Jitendra Narayan Dev, has sought clarifications from  Director General Sanjiv Gautam  of the Civil Aviation Authority of Nepal (CAAN) in an apparent bid to fire him, and in doing so he is taking  sides with a blacklisted Spanish contractor, Constructora Sanjose SA.  

Tourism Minister Dev's move is likely to benefit the Spanish firm which has been blacklisted by the government after the CIAA  terminated its contract for the Tribhuvan International Airport (TIA) Improvement Project. The contract termination has resulted in a legal battle over  compensation claims and counter claims.  

Dev has started a process for removing CAAN DG Gautam, questioning him for, among other things,  scrapping the contract with  Constructora Sanjose. 

The Spanish contractor was blacklisted by the Public Procurement Monitoring Unit at the  Office of the Prime Minister and Council of Ministers on July 12, banning the company from participating in any procurement and other business with public and government agencies in Nepal for two years. 
While the Prime Minister's Office has blacklisted the Spanish contractor and CAAN is fighting a legal battle over a compensation claim in the TIA improvement  contract dispute, the minister is all out  to remove  DG Gautam.

“The minister's move  against the CAAN director general is ultimately going to benefit the Spanish contractor, which may now find itself on stronger ground  in its claim  that the contract termination was wrongful and has indeed caused it damage equal to the amount it has demanded,” said a source at the Ministry of Culture, Tourism and Civil Aviation. 

Earlier on Wednesday, Tourism Minister Dev had sent a letter to  CAAN DG Gautam seeking clarifications  why the government should not fire him on the basis of a number of issues including the termination of the contract with  Constructora Sanjose SA. 

Gautam has already submitted his 22-page clarifications to the ministry along with 1,700 pages of supporting documents. In his clarification, Gautam has denied all the allegations of the minister and argued that it was the CAAN board chaired by the tourism minister himself that had called the shots in the termination of the contract.

Unsatisfied with the performance of the Spanish contractor,  which was also seeking a deadline extension by two years despite its poor progress record, CAAN had scrapped the contract last November. The aviation regulatory agency and the Spanish firm are currently in a legal battle over their compensation claims and counter claims.

 CAAN had seized the performance guarantee of Rs 578 million and Rs 1.08 billion in advance payment. After the termination of  contract, the Spanish company demanded Rs 2.17 billion in compensation from CAAN.  CAAN for its part paid only Rs 90 million to the company. CAAN is a making a counter compensation claim of around Rs 6 billion from the ousted Spanish firm. 
Tourism Minister Dev did not respond to several calls by Republica for his comments over the issue.  


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