There were irregularities in Omni deal, House committee concludesParliament’s Public Accounts Committee asks the Commission for Investigation of Abuse of Authority to look into the case.
There were irregularities in the contract the government signed with Omni Business Corporate International to procure essential medicines and health products to combat Covid-19, Parliament’s Public Accounts Committee has concluded.
A meeting of the committee on Friday has also decided to ask the Commission for Investigation of Abuse of Authority to conduct a detailed investigation into the government’s deals and book officials for taking undue advantage of the Covid-19 pandemic.
“The committee has concluded that there were irregularities in the procurement,” said Roj Nath Pandey, secretary of the committee. “We will ask the CIAA to conduct a thorough investigation and to book officials involved in irregularities.”
Pandey said the committee reached the conclusion after studying contract documents of the deal and discussing the matter with Minister for Health Bhanu Bhakta Dhakal and other officials. The committee, however, hasn’t named those involved in the irregularities.
The government on March 25 had awarded Omni Business Corporate International the tender to purchase medical equipment from China after reports of more Covid-19 cases in the country. Omni brought in its first cache of supplies on March 29, but the Department of Health Services annulled the tender on April 1 after the deal courted controversy.
The committee had summoned Dhakal on Friday to ask questions about the deal with. During the meeting, the minister defended himself saying the government had to sign the deal with Omni as it assured it would provide test kits and safety gear in a short time even when there was a shortage of such medical items worldwide. “We cancelled the deal and confiscated its security deposit after it failed to deliver the goods as per its commitment. So, it would be wrong to say the government favoured the company,” said Dhakal, defending the deal before the committee.
Though there was an agreement to procure medical goods worth Rs 1.03 billion, Omni brought materials worth only Rs280 million, according to him.
The committee has found that the deal was done without following due legal process. The government hadn’t sought a price list for the items it ordered from Omni prior to awarding the contract, according to the committee’s investigation.
Bharat Shah, chairperson of the committee, said the equipment, test kits and medicines were purchased at inflated rates. The committee’s investigation has found Omni bought N95 masks at Rs 828.67 per piece though the market rate was only Rs 462.50 while infrared thermometers were bought at Rs 7,500—the market rate was only Rs 4,000 per unit.
The parliamentary committee also found it suspicious that Dr Khem Karki, Dhakal’s adviser, was involved in the negotiation process. Six companies had submitted their quotations for the procurement and after negotiations were held, Karki’s panel recommended Omni for the deal. The decision was approved by the health minister, and necessary documents were sent to Omni and its bank the same night.
The report also pointed out that the deal was awarded to Omni even when it had no prior experience of importing medical goods. It didn’t have documents to prove it was tax compliant.
Pandey said they are hopeful that the CIAA will further investigate the case based on the findings of the committee and book those involved in irregularities. During Friday’s meeting, Dhakal informed the committee that the commission was already investigating the case. He said that it had recorded statements from ministry officials involved in the deal.
But the CIAA’s track record on big corruption cases is not stellar. In January last year, the Public Accounts Committee had directed the anti-graft body to carry out a detailed investigation against those involved in the procurement of two wide-body aircraft for Nepal Airlines. The committee had concluded that at least Rs 4.35 billion was embezzled during the procurement process. However, the commission hasn’t expedited further investigation into the case.