Security Press Scam

Minister Baskota himself acted as agent in procurement

Published On: February 21, 2020 08:45 AM NPT By: Sunil Sapkota

KATHMANDU, Feb 21: Outgoing communications minister Gokul Baskota engaged in direct correspondence with the French company INGroupe for procuring a security printing press, it is learnt. 

“In issuing a letter on May 30, 2019 addressed to INGroupe, Baskota acted as an associate of the French company’s Nepal agent, Yeti Holdings,” a member of the  Public Accounts Committee (PAC) of the lower house of parliament, Dharmashila Chapagain of NCP, said at a committee hearing on the procurement of the security printing press Thursday. “It is a matter of great concern that the minister himself engaged in correspondence on behalf of the official agent,” she said, adding “The PAC should initiate extensive investigations into the matter.”

The PAC has been holding a series of discussions with the party and officials concerned with the issue after it came to light that the government’s decision which was taken as a purported government to government (G2G) deal would incur an additional financial burden of several billion rupees to state coffers. 

A cabinet meeting on December 23, 2019 had authorized the Ministry of Communications and Information Technology to make an appropriate selection from proposals received from France and Germany, as per Rule 85 (5b) of the Public Procurement Act 2065 BS. Veridos, a German company, had submitted its proposal with the backing of Germany’s federal finance ministry. Another proposal was submitted by INGroupe, an undertaking of the French government.

It may be noted that the government signed a Memorandum of Understanding (MoU) with the French company in February 2019 in connection with the procurement of the security printing press. Communications Secretary Mahendra Gurung, Executive Director of Security Printing Center Bikal Poudel and the late Ang Tshering Sherpa paid many visits to France and Germany since then. 

At Thursday’s hearing, PAC members grilled Poudel on why such high-level visits took place in the interest of a competing party. 

When NCP lawmaker Birodh Khatiwada asked Poudel to furnish details of expenses incurred in the visits, he said the expenses were borne by the French company. Another lawmaker, Rajan KC of Nepali Congress,                   highlighted the need to scrutinize the passports of the officials involved in the deal. Poudel is known to possess a US green card, according to sources.

Cost exceeds Security Printing Center estimate by Rs 8 billion 
Meanwhile, in correspondence between  Baskota and a Swiss company, as per an audio recording that was leaked Thursday, Baskota had asked the company to raise the cost estimate to Rs 28 billion from the earlier estimate of Rs 27 billion in order to increase the commission margin.

Earlier, the Security Printing Center had arrived at an estimate of Rs 35 billion for the security press, inclusive of Rs 8 billion for printing bank notes.

In the leaked audio recording, Baskota is heard asking the local agent to deal with the bureaucracy himself, saying they would shortchange him (Baskota) if the latter negotiated the deal. 

Lawmaker Minendra Rijal of Nepali Congress asked about the motive behind the G2G deal carried out without a global tender. 

“It’s a dirty business,” he said. PAC members have demanded  a subcommittee to investigate the whole issue. 

Minister demanded Rs 2 billion as commission
Talking to Republica, Bijaya Mishra, the agent of a Swiss company whose proposal for setting up a security printing press in Nepal on a BOOT basis was rejected outright, claimed that the minister had demanded Rs 2 billion as a commission for that deal. He also said that he has a separate audio recording relating to a satellite deal. 

Mishra is said to have leaked the audio recording once his company was rejected. He claimed the government would have to pay an additional of Rs 7 billion if the deal with the French went ahead. 

Rs 1b overestimate for SPC building
PAC members also claimed that the cost estimate for a building to house the security printing press has increased by an additional Rs 1.24 billion.

Mohamad Estiyak Rai, who recently resigned as urban development minister, said the proposed cost for the construction of the building is 34,000 per square meter. 

A bomb-proof building for the prime minister’s residence and the federal parliament has been costed at just Rs 10,000 to 12,000 per square meter. “The additional cost estimate for the SPC building is tantamount to corruption,” he said. The government is planning to construct a building for the purpose in Banepa over an area of 1,508 square meters.

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