NOC land purchase scam: House sub-committee says NOC violated procedure

- Rajesh Khanal, Kathmandu

Aug 12, 2017-

A sub-committee under the parliamentary Bill Committee has concluded that Nepal Oil Corporation (NOC) violated procedure when buying land to build fuel storage plants.

Lawmakers on Thursday declared that the state-owned oil monopoly could not make land deals on the basis of bylaws it has created on its own.

“The company should follow the regulations made on the basis of the Land Acquisition Act,” said Revati Raman Bhandari, coordinator of the sub-committee, “and they have to be endorsed by the Cabinet or the concerned ministry.”

NOC is currently being scrutinized by several government agencies over allegations of making land deals at inflated prices and embezzling funds totalling millions. The public enterprise has tried to justify its decision by invoking its Financial Administration and Procurement Bylaw 2008.

According to the parliamentary sub-committee, government-owned corporations are required to follow the regulations under the Public Procurement Act to buy fixed assets.

“Although NOC’s bylaw contains provisions regarding purchase of immovable and movable assets like land, building, oil and software, the company cannot violate the provisions of the Public Procurement Act,” Bhandari said. 

NOC has been accused of misappropriating funds amounting to Rs800 million while buying land valued at Rs1.61 billion in four places: Bhairahawa, Chitwan, Sarlahi and Jhapa. The corporation started the process of purchasing land to build oil storage facilities in all seven provinces following the government’s instruction to maintain 90 days of fuel in reserve.

NOC has been charged with ignoring the Public Procurement Act and Land Acquisition Act while conducting the land deals besides overblowing prices of the plots.

It has been charged with misappropriating funds totalling Rs568 million while buying land in Chitwan and Jhapa districts alone. Similarly, it has been charged with misappropriating Rs150 million and Rs80 million respectively on its land deals in Bhairahawa and Sarlahi.

A preliminary investigation carried out by the parliamentary Industry, Commerce and Consumer Welfare Committee has also shown that the NOC management broke regulations.

Similarly, the Commission for the Investigation of Abuse of Authority (CIAA) has started a detailed enquiry into the controversial land deal. The anti-corruption body has boosted its investigation after finding procedural errors in the land deals.

Published: 12-08-2017 08:51

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