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Accounts committee ignores crucial facts in aircraft purchase probe

While probing irregularities in the procurement of two Airbus wide-body jets, a subcommittee of the parliamentary Public Accounts Committee seems to have failed to take cognizance of some crucial facts.

Confirming irregularities in the aircraft deal, the PAC has asked three tourism ministers—one sitting and two former—to take “moral responsibility” for failing to take necessary caution while releasing the funds for buying the planes.

Jitendra Narayan Dev was not serving as tourism minister when the decision to send the first instalment of $79 million was taken. Instead, then prime minister Sher Bahadur Deuba himself was looking after the aviation portfolio. The decision was taken on June 19, 2017, two weeks after Deuba was elected the country’s 32nd prime minister. Dev was appointed tourism minister in the Deuba-led coalition government on July 26, 2017.

The second and third instalments were sent after Rabindra Adhikari was appointed the tourism minister in the present KP Oli administration.

On April 20, 2017, the Pushpa Kamal Dahal-led coalition had agreed to act as the loan guarantor for the Nepal Airlines Corporation for procuring the aircraft. The decision to send $1 million as commitment fee to the AAR Corporation—supplier of the two wide-body aircraft—was made on March 1, 2017.

Dev claimed his name was included in the report with “ill-intention”.

“I was not involved in any decision in relation to the aircraft purchase,” Dev told the Post. “This report is biased. The report lacks facts.”

The subcommittee had also implicated Prem Kumar Rai, a former tourism secretary who is currently the home secretary, but while endorsing the report on Monday, the PAC gave him the clean chit, saying his name was “erroneously included”.

PAC has established misappropriation of around Rs4.36 billion while purchasing the two aircraft. Asked about this glaring error, Pradip Yadav, a member of the subcommittee from the ruling Sanghiya Samajbadi Forum-Nepal, told the Post that the sub-panel had prepared its report based on the details sought from the Tourism Ministry.

“We were told Dev was drawing salary [as tourism minister] and he was also in the Nepal Airlines Corpo-ration Board, and accordingly we recommended action against him, along with Adhikari and Shahi,” said Yadav. A tourism minister, however, is not a member of the NAC Board.

“This shows poor decision-making by the parliamentary committee,” Dev said. “I will seek legal remedy for such wilful negligence on the PAC’s part.”

The PAC has also recommended action against two tourism secretaries—one sitting and one former.

At Monday’s PAC meeting which endorsed the subcommittee’s report, lawmaker Hridayesh Tripathi, a PAC member, had expressed dissatisfaction at the way the investigation was carried out and the report prepared. “I am not overreacting, but trust in our investigation and reports is now eroding,” Tripathi told the PAC meeting on Monday.

The subcommittee also overlooked some technical aspects in course of the investigation. Its report states that the Nepal Airlines had signed a $209.6-million contract for two A330-200 jets with the United States-based AAR Corp in April 2017, ignoring the rate suggested by its A330-200 Request for Proposal evaluation subcommittee in 2009.

The report said that the subcommittee had suggested that each jet would cost $93,047,434 (after adjusting 2.76 percent price escalation) based on the 2016 sales price. This ignorance has incurred $23.6 million losses in two jets, it said.

The jet cost, however, was based on the 2009 sales price list, and subcommittee members calculated the losses based on the 2016 sales price list. “We had informed PAC that there was a typo in the evaluation report. Instead of 2016, it should have been 2009. But PAC investigators refused to correct the error,” an official at the Nepal Airlines said.



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