KATHMANDU, Aug 25: The scandal surrounding the acquisition of two wide-body aircraft by Nepal Airlines Corporation (NAC) seven years ago has attracted the attention of the American government. The US Embassy recently expressed its interest in this matter by sending a letter to the Ministry of Law. According to a reliable source within the Ministry of Law, the letter requests details about the 15 individuals involved in the aircraft purchase, along with their legal opinions regarding their roles in the case.
Back in Poush 2073 BS, the NAC procured two wide-body aircraft through a consortium consisting of AAR Corp from the United States, German Aviation Capital from Germany, and High Fly Aeros from Portugal. The purchase was estimated to involve around Rs 4.35 billion in corruption. The Public Accounts Committee of Parliament concluded on December 30, 2018, that corruption had indeed taken place in the procurement contract.
AAR Corp, the American company within the consortium responsible for aircraft sales, has informed regulatory authorities in the US about potential violations of American corruption laws by its employees during transactions in Nepal and South Africa. As part of this investigation, the US embassy has requested the Nepal government to provide information about 15 individuals linked to the aircraft purchase, including two former ministers and the former general manager of NAC.
Phaninder Gautam, the joint secretary and spokesperson for the Ministry of Law, stated that the ministry receives numerous letters seeking legal consultation, making it unclear whether such a letter has been received or not. "The embassy often seeks information for various legal consultations and assistance. I cannot confirm whether the wide-body aircraft issue was the topic of consultation," Gautam mentioned. According to insider information, the letter reached the ministry about a week ago.
'Wide-body probe should include aviation expert'
Both the United States' Justice Department and the Securities and Exchange Commission, as well as the UK's Serious Fraud Office, have been informed about potential legal violations in the wide-body aircraft purchase in Nepal.
In the 55th Auditor General's report released in March 2018 regarding the aircraft procurement case, it was noted that the procurement process for the wide-body aircraft did not adhere to the legal requirements. A sub-committee under the Public Accounts Committee of parliament had conducted an investigation into the matter at that time.
A sub-committee that emerged from the audit committee has submitted a report recommending actions to be taken against several individuals, including tourism secretary Krishna Prasad Devkota, Shankar Adhikari, former tourism ministers Jeevan Bahadur Shahi and Jitendra Dev, and the former general manager of NAC, Sugat Ratna Kansakar.
The report has established that the procurement of the two wide-body aircraft was associated with a 4.35 billion rupee scam. Despite the report's findings, its recommendations have not yet been implemented. Notably, the decision to purchase the wide-body aircraft was made during the tenure of CPN (Maoist Center) Chairman Pushpa Kamal Dahal* as Prime Minister. The final installment was paid under the leadership of Rabindra Adhikari from CPN-UML when he was the Minister.
The initial specifications outlined a maximum take-off weight of 242 tons; however, a 230-ton aircraft was ultimately acquired, leading to alterations in the pricing. This discrepancy was deemed a significant irregularity by the Public Accounts Committee of parliament.
Following an investigation, the sub-committee has suggested delving deeper into various aspects such as cost price determination, tender selection process, adherence to contract conditions, and the establishment of an intermediary entity named High Fly X, involving modifications to contractual conditions midway. During the tender process conducted by the NAC, 10 companies submitted their proposals. Allegedly, the evaluation committee identified the 2016 Airbus 330-200 at an approximate value of $88.1 million.
Reliable sources indicate that the evaluation committee chose a consortium comprising influential companies - AAR Corp from the US, German Aviation Capital from Germany, and High Fly Aeros from Portugal - for the aircraft procurement process.
The NAC established a special committee consisting of 11 members, including technicians, directors, and captains, before finalizing the aircraft procurement. This committee, which featured individuals such as Brihadman Tuladhar, Pradipraj Bhandari, Captain Ravindra Kumar Sherchan, Umesh Paudel, Ravindra Shrestha, Janak Kalakheti, Paras Paudel, Upendra Paudel, Prabhas Kumar Karmacharya, and Ganesh Bahadur Chand, played a pivotal role in the decision-making process.
Based on the recommendations of this special committee, the NAC proceeded with the aircraft purchase. However, a sub-committee operating under the Public Accounts Committee has proposed that specific measures be taken against these individuals, given that they were identified as key figures responsible for endorsing the aircraft procurement strategy that involved 11 NAC committee members.
As public demand grows for greater transparency and accountability, there is an increasing call for the government to uncover all instances of corruption and ensure that those found guilty are subjected to thorough investigation and appropriate consequences.
*Corrected
