PAC forms sub-committee to probe decision to buy wide-body jets

Published On: August 10, 2017 01:00 AM NPT

KATHMANDU, August 9: The parliament's Public Accounts Committee (PAC) has started a probe against the national flag carrier's decision to buy two wide-body jets.

The house panel on Wednesday questioned Sugat Ratna Kansakar, managing director of Nepal Airlines Corporation (NAC), on qualification of American supplier and release of pre-delivery payments, among other issues.

As the PAC members were not satisfied with answer furnished by the NAC management, the house panel directed the national flag carrier to submit all documents of purchase deals like tender evaluation, profile of the American supplier AAR Corp, and details of the company that received payment, among others, within five days. 

Lawmakers said they suspect irregularities in the procurement process as the national flag carrier chose to sign deal with an agent company instead of signing a deal directly with the aircraft manufacturer. They also said that the pre-delivery payment was also sent to another party, making the procurement process dubious. 

Lawmaker Usha Gurung said that the procurement deal is similar to the procurement case of eight years ago when Airbus had returned the advance payment made by the NAC.

Kansakar, during his first stint at the helm of the NAC, had decided to send US$ 750,000 as a commitment amount to Airbus, violating procurement regulations. He was arrested and free later after Airbus returned the advance payment. 

“At that time, we had asked the NAC not to make same mistake again. But the new agreement has number flaws which need to be investigated,” added Gurung. 
NAC signed the deal two purchase two wide-body Airbus A330-200 in April. The deal is worth $209.6 million. 

Similarly, lawmaker Bharat Sah said that they were surprised by the fluctuating price of the aircraft. “Market price of Airbus A330-200 is said to be $300 million, but the NAC has signed the purchase deal at $109 million each,” Shah said, asking the NAC management to furnish the house panel the correct price of the aircraft. 

The PAC has also has decided to form a sub-committee to investigate the issue, according to PAC Chairperson Dor Prasad Upadhyaya. But the PAC has yet to nominate members in the sub-committee.

At the meeting, the lawmakers also criticized Kansakar for his failure to operate the Harbin Y12e Chinese aircraft as well the internal management of the national flag carrier.
Lawmaker Ram Hari Khatiwada criticized the NAC management for hiring an Italian pilot offering him monthly salary of $26,500 without publishing any public notice. “The same pilot was paid only $12,000-14,000 per month by the previous employer. But the NAC hired him without any competition,” added Khatiwada. 

Responding to Khatiwada, Kansakar said that it was the only method to recruit expert staff on contract basis.

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