DPM Pokharel claims Gokarna Resort lease extended legally

Published On: December 27, 2019 07:58 AM NPT By: Republica  | @RepublicaNepal

Downplays Nepal Trust Act amendment to favor Yeti Group
KATHMANDU, Dec 27: While downplaying the amending of the Nepal Trust Act recently to unduly benefit the business conglomerate Yeti Group, Deputy Prime Minister and Defense Minister Ishwar Pokharel has claimed that the lease for Gokarna Forest Resort was extended in accordance with the provisions of the Nepal Trust Act and relevant regulations. 

Addressing a meeting of the National Assembly (NA) on Thursday, Deputy Prime Minister and Defense Minister Pokharel, who is also chairman of the Nepal Trust Board, claimed that the lease was extended as per the Nepal Trust Act, which was legislated through parliament. 

His remarks come amid criticism of the government from various quarters for extending the lease five years prior to the expiry of the existing lease and without competitive bidding. Concerns were also raised over the decision of the government to effect the amendments to the Nepal Trust Act to unfairly benefit Yeti Holdings. 

While stating that the Trust decided to extend the lease as it stood to benefit from such an extension, Pokharel informed that Gokarna Resort would pay Rs 1.15 billion in rent alone for the extended lease period. But many in the tourism industry say that amount is still way cheaper than the going market rate.

Pokharel refuted allegations that the lease was extended at a throwaway price. “The lease period was extended as per law duly enacted by parliament. I am surprised at lawmakers protesting against such a decision,” he said.

Pokharel repeatedly emphasized that the lease extension decision was as per law endorsed by parliament, and glossed over how the amendment was carried out recently to pave the way for giving the Yeti Group a lease extension. According to sources familiar with the development, Yeti Group was able to bring to bear the influence of those in high political office including Prime Minister KP Oli, due to its nexus with the ruling Nepal Communist Party (NCP).

 Clause 5 (1) of the Nepal Trust Act stated that the property of the Trust shall be utilized in the interest of the nation, which will serve the greater public good. The property, according to this clause, may be utilized to establish and operate educational or academic institutions like a school, college or university, to provide donations for the operation of such institutions, to establish hospitals or health posts and to operate such institutions in a manner prescribed.

However, in the recent amendment, a provision for using Trust property for tourism and entrepreneurial activities was incorporated. Similarly, the Act was further amended to pave the way for extending the lease period even before the expiry of the original lease.

Clause 5(3) of the Act barring extension of the lease before its expiry was amended with a provision to allow such extensions if the lessee wants to invest additional capital to renovate and build new structures and if such an arrangement brings additional economic benefit to the government. The amendment also included a provision to allow the lessee to apply well in advance for a lease extension.

Although the government is required to seek competitive bidding for any lease renewal, the amendment does away with this requirement.

Besides amending the Nepal Trust Act, the government also removed various government secretaries from the Trust board after they did not yield to repeated pressure from top leaders of the ruling party.

Sources said the chief secretary and the secretaries of the Home, Finance, Law, Education and Women, Children and Social Welfare ministries were removed from the Trust board at the direction of Prime Minister Oli himself. Only the secretary at the Office of Prime Minister and Council of Ministers was spared.

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