NOC slammed for awarding fuel import contract to Birat

- Rajesh Khanal, Kathmandu

Nov 6, 2015-

A day after Nepal Oil Corporation (NOC) appointed Birat Petroleum to import petroleum products, lawmakers and consumer rights activists criticized the decision saying that the contract had been awarded to a company that was blacklisted three years ago. 

Lawmakers have suspected NOC officials of being involved in financial irregularities. “Why has NOC granted permission to a blacklisted company?” asked lawmaker Kanchan Chand Wade during a meeting of the parliamentary Industry, Commerce and Consumer Welfare Protection Committee on Thursday. “We smell a rat.” 

On Wednesday, NOC awarded the contract to one company from among the 22 it had shortlisted to import petroleum products. Some officials said that Birat Petroleum had been awarded the contract without conducting a required assessment. 

Jyoti Baniya, president of the Consumers’ Welfare Protection Forum, blamed NOC officials for contracting the company to fulfil vested interests. 

According to him, the company had been found to have been involved in fraud by a high-level investigation committee formed under lawmaker Bhim Acharya three years ago. “A Cabinet decision on April 9, 2012 has also barred the company for its involvement in the scam,” he said. 

Birat Petroleum, owned by Arjun Chhetri, is a Sikkim-based supplier. According to an NOC official, the company is in the process of receiving loads in India. 

Commerce Secretary Naindra Prasad Upadhyay said that it was unfortunate that government officials had been involved in fulfilling their personal benefits rather than serving the national interest. 

Lawmaker Subhash Chandra Thakuri blamed NOC for providing an advance to Birat Petroleum. NOC is said to have paid Rs200 million in advance to the private company. Thakuri raised questions over the legitimacy of providing money to the company. 

Thakuri also blamed NOC for delaying the selection of a company from among the applicants submitting expressions of interest. “At a time when the country has been facing an acute shortage of fuel, NOC delayed acting for almost two weeks just for the benefit of a single supplier,” said Thakuri, seeking government intervention in NOC’s move.

Birat Petroleum is reported to have proposed to NOC to supply petroleum products at prices higher than the prevailing market price. 

The company that proposed to supply fuel from Siliguri, India has quoted a price of Rs198 per litre for petrol and Rs187 per litre for diesel. The local price of petrol in Siliguri is only IRs 66.11 per litre. Adding all the taxes and other charges, petrol can be made available for only Rs106 per litre. 

Another lawmaker Ambika Basnet said the government should investigate the issue. “Besides having a high bid price, NOC has completely remained indifferent to the quality of the petroleum that the company is seeking to supply,” he said.

Commerce Minister Ganesh Man Pun said the government had permitted NOC to decide the technical matters of the fuel supply. “Citing the reason of easing the fuel shortage instantly, the government has permitted the NOC management to allow private companies to supply fuel temporarily,” he said. 

NOC is said to have contracted Birat Petroleum to supply fuel before Dashain. In the expression of interest, the enterprise had sought private companies’ involvement to boost the petroleum supply mainly during the festival season. However, the company has failed to supply fuel even though the festival season is coming to an end. 

Meanwhile, NOC has contracted ITC, a Japanese company, to provide aviation turbine fuel (ATF). Earlier, the oil monopoly had signed a contract with Petromax Nepal to provide ATF. According to the NOC source, ITC has said it will airlift ATF from Singapore.

However, Gopal Bahadur Khadka, managing director of NOC, refuted accusations of wrongdoing. “The company was the lowest bidder among the shortlisted companies.” Khadka said NOC had provided an advance to Birat against its bank guarantee. 

“As a single private company cannot assume excess liability, we have provided the money,” said Khadka, adding that they would recover the money along with interest if the company failed to supply fuel as per the contract. 

Published: 06-11-2015 08:44

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