Corruption allegations rock Nepal’s aviation sector: CIAA files case against former minister and NAC officials

Kathmandu: In a significant development, the Commission for the Investigation of Abuse of Authority (CIAA) has taken legal action against 32 individuals, including former Minister for Tourism, Culture, and Civil Aviation, Jeevan Bahadur Shahi, and Sugat Ratna Kansakar, the former Managing Director of Nepal Airline Corporation (NAC). The case revolves around alleged corruption in the procurement of two Airbus A330-200 aircraft back in July 2018.

The CIAA, in its filing at the Special Court, is seeking compensation amounting to Rs 1.47 billion ($13 million) in damages. The investigation suggests that consortium partners from the supplier side, including AAR International INC, German Aviation Capital, and Hi Fly Transporte Aereos SA, in collusion with NAC office bearers, caused significant losses to the corporation.

According to the press release issued by the CIAA, former Tourism Minister Shahi is accused of involvement in the scandal, leading to intentional damages to NAC. The allegations include decisions resulting in the procurement of aircraft with reduced specifications at inflated costs, as well as the inappropriate handling of dollar exchange services without adequate guarantees.

Additionally, the CIAA has implicated other key figures, including Shankar Prasad Adhikari, then-Secretary at the Ministry of Culture, Tourism and Civil Aviation (MoCTCA), and chairman of NAC’s executive board. Seven executive members of NAC and several representatives from the supplier companies are also facing charges.

The controversy dates back to January 2016 when NAC initiated plans to procure new aircraft, followed by government guarantees for the purchase in September of the same year. The acquisition process culminated in the addition of two Airbus A330-200 aircraft to NAC’s fleet in 2018.

However, subsequent investigations by the Public Accounts Committee (PAC) of the Legislature-Parliament uncovered irregularities in the procurement process. The committee found discrepancies in adhering to procurement regulations and highlighted the mismatch between the purchased aircraft and the initial specifications.

The CIAA’s legal action underscores the gravity of corruption allegations within Nepal’s aviation sector and marks a significant step towards ensuring accountability and transparency in government dealings.