The Commission for Investigation of Abuse of Authority has opened a detailed investigation into alleged financial irregularities in the procurement process of two wide-body Airbus A330 jets.

Rameshwor Dangal, spokesperson of the Commission for Investigation of Abuse of Authority (CIAA) told the Post, that investigation into the dealings of jets has been launched. “We have also received a copy of the probe report of the parliamentary Public Accounts Committee (PAC) and other documents,” he said. He did not elaborate further.

The $209.6-million Airbus deal, the largest ever in Nepal’s aviation history, became more controversial after some top politicians and experts challenged the probe report, stating that investigators overlooked some technical aspects during the course of the investigation.

The House panel had concluded that the procurement of two wide-body jets by Nepal Airlines Corporation caused a loss of Rs4.35 billion to the government.

The panel has questioned the motives of Nepal Airlines and HiFly Portugal for forming a special purpose vehicle—Hi Fly X Ireland—to specifically look into the procurement process. The committee has termed Hi Fly X as a “fictitious” company and suspects “massive financial irregularities” in the deal.

Stating that Ireland is the biggest tax haven in the world used by multinationals to shelter profits, the lawmakers suspected NAC might have reached a deal with the company to evade tax.

While advance payment was released to the Portugal-based HiFly Transporte Aeroes, rest of the payment was released to the Ireland based company, the report said.  

It has also pointed out the mismatch in manufacturer’s serial numbers assigned to NAC jets. Initially, the numbers “1840” and “1842” were issued to NAC. Airbus later assigned “1845” and “1854” after receiving the commitment fee. However, at the Airbus’ manufacturing plant in Toulouse, France, the aircraft serial numbers were “1872” and “1878”.

The “1845” and “1854” that NAC had claimed to be its own actually belong to Tibet Airlines and Spain’s Iberia Airline respectively, the report explained. The panel said that the national flag carrier has violated the public procurement law while purchasing the jets.

As per Clause 236(1) of NAC financial bylaw, the national carrier is required to invite proposals only from the aircraft manufacturers to purchase brand new aircraft. However, it went with Clause 236 (2) of the bylaw which allows the NAC to procure an old plane from a leasing agency, banker or airline operator besides manufacturers, according to the report.