How a multi-billion rupee railway trackbed corruption scam was exposed and ultimately brought down

Published On: September 8, 2020 01:00 PM NPT By: Bal Krishna Gnawali

KATHMANDU, Sept 8: The controversial Inaruwa-Kakarbhitta railway trackbed tender has been cancelled. An invitation to tender was called to construct the 106 kilometers-long trackbed some two months ago. 

The Department of Railway, issuing a notice on Tuesday, announced the cancellation of the tender. The notice informed that bids 2(2076(77 and 3(2076(77 have been cancelled. 

It was revealed that those close to powerful politicians, construction workers, the CIAA, the Public Accounts Committee, the Development Committee and bureaucrats were working to embezzle Rs 10 billion from the contract. Sources say that after public outcry, the Railway Department, under the direction of PM Oli, cancelled the contract. With this, a plan to siphon off billions from the state treasury has been averted. 

Earlier, Nagarik daily had revealed that the Federation of Contractors' Associations of Nepal (FCAN) led a collusion campaign to only reduce 1-1.5% in the proposed Rs 35 billion of the contract. The total contract amount, including VAT, was around Rs 35 billion. 

A list obtained by Nagarik and Republica revealed that 18 A-class contracting companies had distributed 54 different packages among themselves. The remaining packages were distributed to their partners as JV (See the list below). 

About half a dozen business people had colluded with senior officials within the PMO, the CIAA, the Public Accounts and the  Development Committee in the parliament, Nepali Congress leaders, and senior officials in the Railway Department to award the contract as per their choosing.

The construction group had also decided on details of the invitation to tender, allocation of the contracts to companies, barring of international bidders, and the amount to be paid to the people in power. 

In order to bar international companies from bidding, the project was broken down into 54 different mini-projects, and the prior experience of working in trackbed projects was mandated for domestic companies willing to bid for the project. Around 150 domestic companies were automatically barred to bid for the project. 

After this, they agreed to decrease the bidding amount by only 1-1.5%, and everyone was going to contribute at least 5% to pay off the government officials. 

The tender was called to ‘support PM Oli’s railway dreams’. The trackbed was going to be built from Jhapa, in order to get a green signal from the prime minister. 

The Public Procurement Act was also flouted in the invitation to tender. The Act mandates that land acquisition, EIA, IEEA and cutting down of trees have to be completed on the proposed construction sites before a public tender. However, other than a 35-day notice for land acquisition, no other works have been carried out in and around the proposed trackbed construction sites. The Ministry of Forests and Environment has not permitted the cutting down of trees in the area. More than 800 trees will have to be cut down along the proposed trackbed. 

Land compensation has been the biggest issue in Nepal’s development projects. A committee has already been formed in Jhapa to oppose the proposed land compensation scheme.  

The Ministry of Finance was not happy with the invitation to tender before carrying out the needed works. Also, the government had not allocated the needed resources for this project in the current fiscal year budget.


Leave A Comment