Purchase of security press through G2G deal to cost Rs 7b more

Published On: January 9, 2020 07:55 AM NPT By: Sunil Sapkota

KATHMANDU, Jan 9: The government has expedited the process to procure a security printing press worth billions of rupees without competitive bidding process in the name of government to government (G2G) deal.

This comes amid warning from experts that the purchase of a printing facility worth billions of rupees without competitive bidding could put an additional financial burden of several billion rupees on the state coffers. Also, there is no guarantee that the purchase under G2G agreement could cost less than the market rate. 

Earlier, Nepal Electricity Authority (NEA) had courted controversy when it reached a G2G agreement with India to purchase electric bulbs. The NEA was forced to cancel the bid after it was found that private parties were ready to supply the same bulb at much cheaper price than the price offered under the G2G agreement. 

A cabinet meeting held on December 23, 2019 had authorized the Ministry of Communication and Information Technology to select an appropriate proposal received from France and Germany as per the Rule 85 (5b) of Public Procurement Act 2065 BS. 

Minister for Communication and Information Technology Gokul Banskota made public the cabinet decision three days later. Banskota had said during the weekly press briefing that the process to procure security printing facility had moved forward on the basis of G2G agreement following a decision from the ministry.

The government has received one proposal each from France and Germany. While the French Company INGROUPE has proposed to set up the press at Rs 23.16 billion, the semi-government Germany company Veridos has offered to set up the facility at Rs 23.62 billion. Officials said the ministry is likely to take the decision on the proposal of French company saying that it was cheaper than the price offered by the Germany company.

The move of the government is set to repeat electric bulb purchase saga that took place a few years ago. The local agent of the French company is Yeti Holdings, which has courted controversies for using political influence to secure government land belonging to Nepal Trust at throwaway prices. 

Experts dealing with the security printing facilities, however, argue that the government could have saved billions of rupees if it had purchased the facility through global competitive bidding. The Public Accounts Committee under the House of Representatives (HoR) has started holding discussions on the issue after it came to light that the government decision in the name of G2G deal would cost financial burden of several billion rupees more to the state coffers. 

An expert dealing with the issue of security printing facility, Bijaya Prakash Mishra, said the government is trying to embezzle at least Rs 7 billion from the state coffers. Mishra said that he could justify his claim before the government officials by inviting prices of security printing facility from various renowned companies working in this field. 

Information Technology (IT) expert Sudip Raj Pandey said the government had expedited the process to purchase the printing facility in the guise of G2G agreement, with an intention to embezzle several billion rupees. 

A decision of the Ministry of Communication and Information Technology to sign the Memorandum of Understanding(MoU) with the French government on the issue even before cabinet gave a nod has also raised serious suspicious about foul play involved in the deal. Officials at the Ministry of Communication and Information Technology themselves admit that the price could have been much cheaper to set up the facility if the government had opted to go for global tender.

Sources familiar with the development argue that Minister Banskota is pressing for G2G deal for the printing facilities over commission amount the local agent receives on the deal. “Local agent receives a minimum of 15 to 25 percent of the total price in commission. It is because of the same interest that Yeti Holdings is pressing hard for purchasing satellite and security printing through G2G agreement,” said a source closely following the development.

Sources said late Ang Tshering Sherpa, who owned the Yeti Holdings, was scheduled to fly to France on the following day of the helicopter crash in Taplejung in which he along with then Tourism Minister Rabindra Adhikari died on February 27, 2019. 

It may be recalled that the Department of Passports (DoP) under the Ministry of Foreign Affairs had cancelled the global tender for electronic passport in the eleventh hour at the instruction of Prime Minister KP Oli on August 27, 2019. Sources claimed that the decision was made in the interest of the French company’s local agent Yeti Holdings.


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