NOC issued Rs 500m to firm with no supply guarantee – My Republica

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KATHMANDU, Nov 21: Nepal Oil Corporation (NOC) Managing Director Gopal Khadka has been found issuing Rs 500 million unlawfully to Petromax Nepal to open a letter of credit (LC) for importing Aviation Turbine Fuel (ATF). Khadka had earlier caused controversy by issuing Rs 200 million to black-listed Birat Petroleum.

According to NOC sources, Rs 500 million was issued to Petromax Nepal without any performance guarantee.
 

NOC awarded Petromax Nepal the contract to supply ATF to ease the ongoing fuel crisis. Altogether 22 local and international firms had expressed interest in supplying petroleum products to Nepal. As per the agreement, Petromax Nepal is to supply ATF to Nepal continuously for 15 days after receiving the contract. However, it has been 22 days since the contract award, but Petromax Nepal has not yet supplied a single drop of ATF.

As the result of the NOC lapse, it has lost control over the money it has issued and is finding it difficult to recover it. Moreover, the company is also unlikely to supply the ATF soon. As per the agreement, the company should have supplied 6,000 kiloliters of ATF.

A source at NOC said the private company was supposed to supply ATF initially from Kolkata. On failure to supply from Kolkata, Petromax Nepal had informed NOC that it would supply from Bangladesh. Failing to deliver from Bangladesh also, the company is said to be preparing to supply from Lucknow.

According to NOC, the company had proposed to supply ATF from Bangladesh at Rs 190 per liter. As of now, the company has said it is to supply the fuel at Rs 180 per liter from Lucknow.

"If the amount was issued against a performance guarantee, the company could be penalized and fined for failure to make the supply on time," the NOC source said.

The source also said that Khadka's decision has weakened the financial condition of NOC. "Other interested firms had proposed to supply ATF under their own investment," NOC sources added.

Khadka had not notified the NOC board or the relevent ministry about issuing the amount to Petromax Nepal.

 

Published on: My Republica (November 21, 2015)