OAG questions Nepal Army’s decision to purchase helicopters

The Nepal Army approved proposal of France-based company at a price of 2.56 million euros

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Nepal’s Office of Auditor General (OAG) has raised question over Army’s decisions to purchase three helicopters—one medium and two light helicopters—without or limited competition, The Kathmandu Post reports.

However, the Army has defended its decisions, saying that they were taken out of compulsion and necessity.

According to the Post report, the Army said the purchasing process had already moved ahead and that it was waiting for their delivery.

According to the OAG’s 55th Annual Report, the Army signed a purchase agreement with Italian company Agusta to purchase a medium-size helicopter. It was the only company to submit cost estimates when the Nepal Army sought cost details from the helicopter manufacturing companies.

Although companies from six countries were listed as potential suppliers of helicopters, only the Italian company had submitted the cost details. Based on the single proposal, the army prepared the cost estimate of 14 million euros and decided to purchase the helicopter from the same company for 13.98 million euros, according to the report.

A Cabinet meeting on June 30, 2016 had approved NA’s purchase plan, directing it to procure a helicopter by ensuring competition. “However, as only one company submitted the proposal and the same company was awarded the contract, competition was not ensured,” the OAG said.

Nepal Army Spokesperson Brig General Gokul Bhandari, however, said the Army had to purchase the helicopter from the Italian company as other companies failed to meet the required technical specifications. The Nepal Army plans to replace the aging Super Puma helicopter with the new aircraft for VVIPs’ travels. It occasionally uses an MI-17 helicopter for the purpose, according to the Nepal Army.

The report also unveils that the Army decided to purchase four types of equipment worth 386,200 euros from the Italian company although they were not part of the procurement plan. “Purchasing equipment unrelated to the procurement plan is inappropriate,” the auditing body’s report points out.

It has also raised question over the purchase of two light helicopters. Despite inviting tenders for purchasing the helicopters together, the Army decided to purchase only one Écureuil from France based-Airbus Helicopters in the first phase without any valid reason.

“The NA sought a separate proposal later to purchase another helicopter and subsequently decided to procure a helicopter from Bell Helicopters,” the OAG report says. Airbus Helicopters and the US-based Bell Helicopters had submitted proposals.

The Army approved the proposal of the France-based company at the price of 2.56 million euros, it says. The Army had estimated the cost at 3.19 million euros to purchase a light helicopter.

Bell Helicopters was the lone company that responded to a separate NA tender for another light helicopter. Subsequently, the Army decided to purchase it from Bell at $3.8 million. “Although the deal with the American company was signed after the Cabinet approved the NA proposal, it was against the specifications set earlier,” the OAG has noted in the report.

NA Spokesperson Bhandari said they decided to purchase different helicopters going beyond the pre-determined specifications after realising the Army’s needs diversified services.

“For example, the Écureuil can fly in the high altitude but it has a lower passenger-carrying capacity. Bell cannot fly as high as Écureuil but it can accommodate more people,” he said. The Army has four functioning light helicopters in its fleet.

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