Scam exposed in oxygen plant procurement during COVID-19 pandemic

Published On: June 1, 2024 07:45 AM NPT By: Tapendra Karki

KATHMANDU, June 1: It has been revealed that a scam of millions of rupees took place in the country while purchasing oxygen generation plants during the COVID-19 pandemic. It has also been revealed that the then Director General, Director of the Department of Health Services, in collusion with the Nepal Country Manager of the United Nations Office for Project Services (UNOPS), burdened the Nepali state with exorbitant expenses.

The Department of Health Services had given UNOPS the authority to purchase oxygen generation plants and oxygen concentrators, citing the COVID-19 pandemic as the reason. Despite the department being in a position to conduct the procurement through fast-track tendering itself, it assigned this responsibility to UNOPS. Without any reason or basis, funds were sent to UNOPS for procurement based on specifications prepared by the department that matched a pre-selected company.

Komal Karki, the then UNOPS Country Manager for Nepal, and Charles Rochford Callan, responsible for overseeing Bangladesh, Bhutan, India, Nepal, Pakistan, and Sri Lanka, embezzled over Rs 33.45 million during the procurement of oxygen generation plants during the COVID-19 pandemic, leading to excessive financial burden on the state.

The Department of Health Services incurred billions of rupees in expenses while purchasing through the United Nations agency, directly associating the state with the embezzlement. At the time, the department faced opposition as it was deemed inappropriate to involve established international development partners in procurement without a proper cause and basis. However, the department forcefully proceeded to grant the said agency the authority to purchase goods and allocate funds.

The then director general of the department, Dr Dipendra Man Singh, and the Director of the Administration Division, Dr Ramesh Kharel, had authorized UNOPS to utilize the funds obtained through a loan from the World Bank for the procurement of goods.

At that time, the Director General, Dr Singh, and the Director of the Administration Division, Dr Kharel, had authorized UNOPS to spend $4,517,378 for the purchase of oxygen generation plants. Singh himself had overseen the procurement process. Additionally, millions of rupees were expended during the purchase of oxygen concentrators.

"Everything seems to be guided by the thought that when an UN agency makes a purchase, there will be no audit or oversight of the accounts. Therefore, it seems that the responsibility for the purchase was given to UNOPS by the Nepali officials," said an official from the Ministry of Health.

The sources have claimed that the operators of the company that was ready to make the purchase at that time are now absconding. The department itself procured equipment worth Rs 66,000 from Technical Associates Services, whereas UNOPS bought it for 245,000 US dollars.

During the pandemic, funds received from the World Bank were intended to purchase oxygen plants, PCR kits, and oxygen concentrators in all seven provinces. Although the department could have procured these items through its own system, it allocated the budget to UNOPS, an organization that must also undergo internal audit scrutiny.

The department had authorized UNOPS to purchase goods equivalent to 4,517,378 US dollars, or about Rs 600 million. There was no audit conducted anywhere for this spending.

The former director of the department, Singh, denied that any goods were purchased at inflated prices. "It's wrong to say that it was bought at a higher price. We are still investigating what happened in the decision-making process. At that time, such a decision was made to fight against infectious diseases," he said.

He admitted that he had decided to give funds to UNOPS for the procurement of goods, claiming that it was the only option at the time to procure goods to combat the disease. "Our aim was only to fight the disease, that's why such a decision was made," he said.

UNOPS had purchased the equipment through the company of trader Sanjay Kumar Tulsyan, Technical Associates Services. At that time, the department had transferred $2,014,600 to UNOPS's account for the purchase of the oxygen generation plant sent by the said company. However, it appears that UNOPS had only disbursed $1,930,600 to the company.

The remaining $84,000 has not been received by the department from UNOPS's account. "This has resulted in a loss of $84,000 to the Nepali government," the source stated. The Department of Health Services had raised questions about this matter with the Office of the Auditor General at that time. Through UNOPS, 1,000 sets of oxygen generation plants were purchased for the seven provinces.

A contract worth $4,517,378 was signed with UNOPS to purchase seven oxygen plants, 1,000 oxygen concentrators, and seven generators for seven provinces. The agreement with UNOPS, signed on 18 May 2021, is expected to be implemented by July 15, 2024.