Around Rs 4b embezzled while buying planes: House sub-panel

- ANIL GIRI, Kathmandu

Jan 1, 2019-

Over Rs4 billion was embezzled while procuring two wide-body aircraft for the Nepal Airlines Corporation as the NAC loses over Rs15 million daily after the planes have been grounded since they landed in Kathmandu, a parliamentary subcommittee has claimed.

The report prepared by the Parliament Accounts Committee (PAC), subcommittee headed by Nepali Congress lawmaker Rajan KC, lists several other conflicts of interest ranging from the ways the letter of intent was issued to the payment modality.

“We’re going to submit the report to the PAC chairman on Wednesday,” KC told the Post, adding that they will reveal all the details after submitting the report to Bharat Kumar Shah.

Even as Airbus, the manufacturer, could receive full payment, a pseudo company and agent were created allegedly to embezzle the money as commission. 

Terming this practice “totally unethical”, the committee has decided to recommend that the Commission for Investigation of Abuse of Authority (CIAA) probe those responsible.

“According to our calculation, over Rs4 billion was embezzled while procuring the two-wide body aircraft and most of the wrong decisions were taken by the NAC,” KC told the Post.

Asked if the then Cabinet headed by Sher Bahadur Deuba was also found guilty, KC ruled out his involvement. The Cabinet only decided that the government would remain the guarantor while two firms lent money to the corporation, he said.

The report says that the NAC decided to procure the planes without a business plan. The subcommittee will recommend action against the officials involved in the procurement process.


After going through a series of documents, several procedural lapses were found in the form of financial embezzlement, shoddy payment process, and disregard for public procurement guidelines.

The 33-page report also recommends that the anti-graft body and the government initiate stringent action against those involved in decision-making, according to a member. “Not only NAC officials, other officials from the Ministry of Culture, Tourism and Civil Aviation, and the Ministry of Finance, among others, should be suspended before initiating action against them. The CIAA should conduct an independent probe,” the report said.

The subcommittee also questions the role of the Citizen Investment Trust and the Employees Provident Fund for not adhering to the government’s instruction and flouting the rules and conditions for lending money to the NAC.

Prior to the deal, the procurement committee, cost and Request for Proposal evaluation committees were found to have flouted several public procurement rules.

The Office of the Auditor General has already made it clear that it was not consulted while making payments to the third party that delivered the planes.

The Public Procurement Monitoring Office had also concluded that 13 procurement rules were flouted. The subcommittee decided to instruct the government to produce before Parliament all the papers related to the procurement agreement between the government and the two lending firms.

The panel is also suggesting measures for improving the NAC management.


Published: 01-01-2019 06:37

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