A meeting of the Public Accounts Committee of the parliament held on Wednesday. Photo: Dipesh Shrestha/Republica
KATHMANDU, Dec 13: The Public Accounts Committee (PAC) of parliament has formed a sub-committee to probe alleged irregularities in the procurement of two wide-body aircraft by Nepal Airlines Corporation (NAC).
A meeting of the PAC held on Wednesday decided to form a five-member sub-committee under lawmaker Rajendra Kumar KC. Mina Pun, Dharmashila Chapagain, Prem Ale and Krishna Lal Maharjan are the members of the sub-committee. The committee has been given 15 days to submit its report.
Interestingly high-profile lawmakers like Minendra Rijal and Hridayesh Tripathi, who were proposed to lead the sub-committee, declined the offer. As a result, the committee proposed the name of Rajendra Kumar KC to lead the sub-committee.
The PAC formed the sub-committee after receiving the investigation report on aircraft procurement from the Public Procurement Monitoring Committee (PPMO). However, it did not hold any discussion on the report.
The parliamentary panel had started a discussion on aircraft procurement about a month ago based on the 55th Annual Report of Office of Auditor General (OAG). The OAG has found serious flaws in the procurement process.
The PAC had directed PPMO on November 28 to investigate the aircraft procurement process and find out whether NAC followed the procurement process as prescribed in the Public Procurement Act. It took the decision after NAC officials failed to answer queries raised by lawmakers.
After the study, the PPMO concluded that NAC procured the aircraft without calling global tender and that there was no open competition. In its report, the PPMO stated that the two aircraft were purchased through a request for proposal (RFP) which does not conform to the provision of Chapter 2 (C) of the Public Procurement Act, 2007. The RFP does not conform to the international open bidding process. It is not clear whether the RFP refers to the same provision of tender stipulated in the Act or a different one, the report said.
The report shows that the estimated cost was inflated and NAC accepted the proposal made by the American supplier AAR Corp as it was. There were no qualifications and technical criteria to evaluate competition among RFP participants.
PAC has alleged the embezzlement of Rs 6 billion in the wide-body aircraft purchase. However, both the ministry and NAC has been arguing that they have gone through all legal processes for aircraft purchasing and no embezzlement has happened during the procurement.
The first wide-body craft of the NAC had landed in Nepal on June 28 this year and the second one landed on July 26.