The Kathmandu Valley needs the installation of CCTV at 21,441 locations. A recent study by the Metropolitan Traffic Office Ranipokhari showed that a total of 9,117 points in Kathmandu, 5,985 in Bhaktapur and 6,339 in Lalitpur require the fixation of advanced cameras for the security purposes, said Office chief and Deputy Inspector General of Police Shailesh Thapa. 
But it is not possible to immediately address the situation. The requirement can be fulfilled gradually. 
The report shows that hiring of additional police force in the Valley is not necessary if it is equipped with the required number of CCTVs. Presently, there are 529 CCTVs in the valley and only 460 are in operation. 
Police, in coordination with the local levels (under the community-police partnership programme), have started fixing CCTVs in the most urgent areas. The valley has 21 local levels and the police office have been already established at every level. 
Besides, the control room vehicle (CRV) has been put in place at 81 locations for the prompt response to crimes in the Valley. 
Despite the provisions of setting up 54 CRVs in Kathmandu, 11 in Bhaktapur and 16 in Lalitpur, the existing number of such vehicles in Kathmandu is less by 10, while Bhaktapur meets the recommended number and one more has to be established in Lalitpur. 
The Nepal Police has been using the CRV as part of its security system since 2063 BS. With the increase in the population, the additional number of CRV is necessary. The police security system is primarily focused on urban areas. A quota for 11,319 police officers and personnel has been allotted for the Valley, and only 9,398 posts have been occupied.

Nepal Leaks 2019 is the outcome of a year-long investigation conducted by a Centre for Investigative Journalism (CIJ) Nepal team in collaboration with the International Consortium of Investigative Journalists (ICIJ).

This probe shows that 55 Nepalis have invested in several foreign countries. Nepal’s law bars Nepalis from investing abroad. Our study found that nearly a dozen business groups are involved in channeling their illegal wealth abroad and bringing the money back into the country in the name of foreign direct investment (FDI).

We have revealed with evidence how ill-gotten wealth is taken abroad, how it is returned to the country under FDI and who are involved in this financial crime within Nepal and outside by building access to powerful people in a way to degrade governance and democracy. This revelation explains their modus operandi and how it affects the country.

The CIJ team took nearly a year to sift through some 3,000 documents. For these reports, we interviewed nearly 70individuals including office staff, their helpers, relatives and stakeholders directly linked with the issue. We pored over documents made available by the ICIJ, investigative journalists from six countries, offices of the company registrar and court orders. We conducted a digital investigation of the evidence thus gathered while preparing these five investigative stories.

First, Nepal’s law bars its citizens from investing abroad. Moreover, we carried out investigations into Nepalis who deposited their money in dubious banks subjected to international scrutiny. In the first story, we have exposed people who have deposited their wealth in Swiss banks.

The Nepalis Who Deposited Their Suspicious Wealth in Swiss Banks

Second, Nepalis were found to have invested their illegally amassed wealth in tax havens countries. Another news report concerns foreign direct investment (FDI) sourced from such countries.

Nepali companies are bringing suspicious Foreign Direct Investment from tax haven countries

Third, emerging business people in Nepal were found to have brought in investment from the companies registered in tax havens in their names and other ventures. The second and third stories are based on this.

How Illegal Funds Are Channeled Into Nepal In the Name Of Foreign Direct Investment

Fourth, a Nepali citizen cannot invest in a foreign country without permission from the government of Nepal. Non-Resident Nepalis (NRN) are allowed to do this. However, Nepali citizens, and NRNs somehow legally, were found to have evaded Nepal’s taxes, invested money in countries where taxes are not strictly enforced, and repatriated the investment. Our fourth story uncovers this phenomenon.

How Nepali Companies Have Used FDI To Whitewash Dirty Money

Major cases of tax evasion in Nepal are also linked to this. Our investigation does not include the investments made by Non-Resident Nepalis in countries having transparent financial systems.

The fifth story is about investments made by 55 Nepalis in foreign countries. This story shines light on Nepalis who have defied the Act Restricting Investment Abroad (1964) to channel their money abroad.

How 55 Nepali Business Elites, Defying Their Country’s Laws, Invested In Offshore Companies

All these stories were translated into English from the five originally prepared in Nepali.

With more and more foreign tourists visiting Nepal, the Nepal Air- lines Corporation’s desire to grow is obvious. To bring more tourists from across the globe. Yet it is not just about tourists. The national flag-carrier flying into destinations like London and Tokyo, and eventually linking the US and Europe to Nepal with connecting flights, is perhaps the stuff of dreams for every patriotic Nepali. Yet while the NAC management has always dreamt big, the national flag-carrier has also gained notoriety as one of the most corrupt public institutions in the country following the restoration of democracy in 1990. This has crimped its growth.

The NAC, founded in 1958, is in a woeful state, with an aging fleet of 13 aircraft. By contrast, Thai Airways, founded in 1960, flies high with 81 planes to 91 destinations around the world. After the formation of a strong government with over a two-thirds majority, Nepalis were enthused that the NAC was bringing two wide-body Air- bus for $209.6 million to expand its international fleet.

 But no sooner had the first of the two-aircraft landed in Kathmandu that discrepancies started appearing in the NAC’s account of the purchases. It appeared the NAC management created shell companies in tax havens and involved many middlemen to oversee the purchases so that it could pocket hefty kickbacks. It was perhaps aided by other senior government officials. 

There were disputes over ownership. The final bill was bloated by some $9 million

There were disputes over owner- ship. The final bill was bloated by some $9 million. When the parliament questioned Minister for Tourism and Civil Aviation Rabindra Adhikari about the dubious paperwork, he lied that he had not sanctioned payment for the two aircraft.

Later, he accepted that he had sanctioned the payment, but only on advice of the Auditor General. But then the Auditor General said that he had offered the minister no such advice.

The Annapurna Media Network wants to sort out this murky business, not to cripple the growth of our fledgling flag-carrier, as those in the government allege. Our singular goal is to rid this important national organization of corruption, make it more robust, and have it proudly carry our emblem in every part of the world.

 NAC’s murky trail of purchase of two Airbus aircraft

•  One party gets the tender. Another strikes the deal. Another owns the airplane. Yet another appears as the seller, which in fact is created by the buyer itself.
• Different laws are applied while purchasing two aircraft. The old seller colludes with middlemen. And the combined ‘escalation price’ is an additional $9 million.
• There are many middlemen. We make an advance payment. There are agents, but no investment. Nei­ther is there a bank guarantee nor a letter of credit.

This is the long and short of the irregularities that took place when the Nepal Airlines Corpo­ration (NAC) procured two wide-body Airbus A330. There are specific rules to follow when the government makes even a small purchase. But while procuring two aircraft costing a whopping Rs 25 billion, there has been extreme negligence.

NAC Finance By-rule 2065, Guideline 236 (1) stipulates that a new aircraft has to be purchased directly from the manufacturer. To circumvent the rule, the NAC said it would purchase a second-hand aircraft. In its Request for Proposal (RFP) issued on Sept 26, 2016, it curiously asked for an aircraft that had flown for under 1,000 hours and that was manufactured after January 2014.

Eleven companies bid for the contract. The lowest bid was by the US company AAR International, Inc, which agreed to provide two new aircraft for $209.6 million. After adding escalation price, over $218 million would be paid. But as AAR didn’t have an aircraft, it brought in German Aviation Capital and Hi Fly Airways as partners.

While signing the ‘purchase deal’ on April 7, 2017, the two sides agreed to make Hi Fly X Ireland the ‘special purpose company’.

The first agreement was signed with AAR Corp on Jan 27, 2017. After 26 days, on Feb 21, ‘Hi Fly X’ was set up at the initiative of the NAC to purchase the aircraft. This is revealed in the NAC executive committee secretariat’s internal memo dated June 13, 2017.

It says, “The fact that the aircraft will be built by Airbus and trans­actions will have to be made with three companies from separate countries will invite practical and legal complications. Therefore, with mutual agreement between the NAC and the consortium, we have decided to form a special pur­pose company Hi Fly X Ireland only for this purchase, in accordance with European laws.”

Dubious ownership

The statement issued by Airbus on June 28, 2018 is still on its web­site. “Nepal Airlines has taken deliv­ery of the first of two A330s, which it will lease from Portuguese lessor Hi Fly,” it says. That was when the NAC was given the first wide-body aircraft. The statement clearly says that the aircraft will be taken by the NAC on lease from the Portuguese lessor ‘Hi Fly’.

Hi Fly Airlines also identifies itself as a lessor company. Its pro­file says: “Hi Fly is a leading wide­body aircraft wet lease specialist operating worldwide. It is a go-to organization for airlines when they need additional capacity to cover their short/medium term or sea­sonal needs.”

Hi Fly claims ownership of both the aircraft. Under “Our air­craft” on its website, it had list­ed A330-243 with Manufacturers Serial Number 1872 and 1878, the two aircraft it supposedly sold to NAC. A few days ago when our sister publication Annapurna Post published related news, the company removed both serial numbers from its website.

The NAC has obtained certificates of ownership for both the aircraft from the Civil Aviation Authority of Nepal. It has also paid customs worth almost Rs 250 million. It claims ownership of the aircraft on that basis. But experts question the veracity of the claim.

In response, the NAC has pre­sented the bill of sale issued by Hi Fly X Ireland, the special purpose company set up by the consortium in which the NAC is a partner. The aircraft are manufactured under the name of Hi Fly Airlines, where­as we have been told we bought them from Hi Fly X Ireland. These are two different companies. There is no record of a name change. “What would’ve been more believable is if Hi Fly Airlines had issued the bill of sale. Hi Fly X has no aircraft under its name. How could a company that has no aircraft have sold us one?” asks a high level NAC official.

The aircraft purchase agreement between the NAC and Hi Fly X had a provision of including the signa­tures of all three companies in the consortium in the bill of sale. Page 39 of the agreement had a sample of the bill of sale in which the logos of all three companies were stamped. But the bill of sale that came with the aircraft is signed only by Hi Fly X, a company that no longer exists. In case legal complexities arise, all the companies in the consortium have a handy way out.

 The aircraft are manufactured under the name of ‘Hi Fly’ Airlines, whereas we have been told we bought them from ‘Hi Fly X’ Ireland 

Lying minister

After Annapurna Post relentlessly published news about it, the parlia­mentary public accounts and inter­national relations committees had launched separate investigations into the case. The Public Accounts Committee (PAC) set up a sub-com­mittee, whose report absolved Home Secretary Prem Bahadur Rai and Tourism Minister Rabindra Adhikari of wrongdoing, but concluded that corruption in the case amounted to a whopping Rs 4 billion.

Adhikari made a statement in par­liament, claiming that no payment was made in the wide-body purchase deal since he became minister. But the NAC has refuted his claim, saying that it made two payments of Rs 8 bil­lion each with the ministry’s approv­al after Adhikari assumed office.

When asked to clarify, Adhikari lied again. The second time around, he said that the payments were made on advice of Auditor General Tan­ka Mani Sharma. Adhikari’s lie was exposed when Sharma told the PAC that he had neither met nor spoken to Adhikari.

Rai was Secretary at the Tourism Ministry when the decision on the wide-body purchase was made. At that time, the tourism secretary automatically held the post of the chairman of the NAC executive com­mittee. Coincidentally, Rai then was also the chairman of the executive committee of the Employees Provi­dent Fund. The fund approved Rs 12 billion-loan to the NAC at his insis­tence, even though the deal had been deemed risky. Deep Basnyat, the then chief of CIAA, the anti-cor­ruption watchdog, had also exerted pressure to see the deal through.

AAR had struck a deal to send an aircraft with the maximum takeoff weight (MTOW) of 242 tons. But in came aircraft with an MTOW of 230 tons. AAR’s Dipak Sharma wrote a letter to NAC’s managing director Sugat Ratna Kansakar clarifying, “An aircraft with an MTOW of 230 tons is good enough for Nepal.”

But although the weight came down, the price didn’t. As a result, the country had to bear a loss of over Rs 1 billion. But despite such collosal losses across the board, powerful authorities remain mum.

Akhanda Bhandari is the editor of Annapurna Post daily.

Broader lessons

Lack of homework adds doubt to new alcohol rules

Although the cabinet is yet to pass Home Ministry’s pro­posed executive order that regulates alcohol “production, sales and consumption,” the government has already stepped up its anti-al­cohol game. Police are monitoring outdoor events that sell liquor, and the proposed “two liquor stores per ward” rule is being enforced. Ram Krishna Subedi, the Home Ministry spokesperson, says the goal is to control unchecked sale of liquor and curtail injurious drink­ing. He has a point.

According to a study of the Insti­tute for Health Matrices and Evalua­tion in the US, mortality by alcohol in Nepal increased by 376 percent between 1990 and 2016. It pointed out that 21 percent males and 1.5 percent females in Nepal are habit­ual drinkers. Liver diseases, cancers and other ailments caused by excess use of alcohol, it said, had claimed 3,972 Nepali lives in 2016.

The government also believes that domestic violence, mainly violence against women, is largely the result of alcohol consumption. “In over 50 percent of these cases, the males get violent against their female partners after consuming alcohol,” says Narayan Prasad Sharma Bidari, says joint Home secretary.

Critics retort that while some pro­posed regulations make sense, in totality, it is bound to fail. Econ­omist Biswo Poudel calls them “nonsensical” and brought without home¬work. If anything, smugglers and bootleggers will now be encour­aged, he says. Sarad Pradhan, a con­sultant for Nepal Tourism Board, predicts that if alcohol is made a social taboo, many foreigners might not come to Nepal. “Countless jobs will be lost. The government tax receipt will dwindle,” he cautions.

Diwas Raja KC, a researcher who has closely studied the temperance movement in the US, is also against such moral policing. “Alcohol alone does not result in domestic violence. Alcohol consumption plus intense patriarchy can,” he says. He points out how the American temperance movement had the bootleggers laughing all their way to the bank.

The “populist” move, say the crit­ics, is intended to draw attention away the government’s signature failures. “With the government seemingly incapable of solving high-profile cases like the rape-and-murder of 13-year-old Nirmala Pant of Kanchanpur, and the resulting public backlash, the government had to show that it was not sitting idle,” a Home Ministry source said.

Many are still unaware of the exec­utive order. Even those who are have little idea how it is going to affect their lives. Alcohol is also culturally important for indigenous communi­ties like Newars and Tamangs.

“These regulations might be suitable for parts of our country. But in those areas where alcohol is considered an integral part of local communities, the government has to think carefully,” says Kashinath Tamot, a historian.

While tough anti-alcohol rules may seem like the perfect solution to many social evils, they are hard to implement. Nor may it be desirable in all cases. Globally, with or without more restrictive alcohol rules, there will be fewer regular drinkers in 2019 than there were in 2018. But perhaps the most troubling aspect about the new regulations in Nepal is lack of homework. This risks not only a backlash. It could also pro­mote hooch. In the Indian state of Bihar the number of those killed by consuming spurious alcohol has shot up following the state’s blanket ban in 2016.

APEX supports sensible measures like stopping teens from buying alco­hol and forbidding kirana pasals from stocking alcohol. It would also be a lot more amenable to new reg­ulations had the government first taken the time to closely study and debate this complex issue. This is not something that can be settled behind closed doors.

Different strokes for different folks

Afghanistan, Brunei Darus­salam, Iran, Libya, Mauritania, the Maldives, Saudi Arabia, Somalia, Sudan and Yemen have totally banned alcoholic bever­ages. As alcohol is forbidden in Islam, there are prohibition on production, sale and consumption of alcohol beverages in some Mus­lim-majority countries.

In India, manufacture, sale or consumption of alcohol is prohibited in Bihar, Gujarat, Mani­pur, Nagaland and the union ter­ritory of Lakshadweep. Indian states observe dry days when alcohol sale is banned, although consumption is permitted. Dry days are usually observed on vot­ing days and national holidays throughout India.

Around 10 percent of the US, by area, forbids sale of alcoholic beverages, especially in the South. Even “moist” counties permit drinking in certain areas, or limit drinking in other ways. Around 18 million Americans live in places where the selling alcohol is illegal. The law restricts import, sale and consumption of alcoholic bev­erages in Bangladesh. No Bangla­deshi Muslim person is given the permit to drink liquor without the written prescription of an associ­ate professor of a medical college or a civil surgeon. It is legal to sell and drink alco­hol in Australia. However, con­sumption of alcohol in designated alcohol-free zones is illegal.

With the exception of some minor local regulations, there are no liquor laws in China. The German and Brazilian laws reg­ulating alcohol use and sale are some of the least restrictive. Anyone aged 18 years or over and who shows approved ID can enter licensed premises and buy alcohol in New Zealand. 

Lithuania’s new liquor law increased the legal drinking age from 18 to 20, significantly cur­tailed opening hours for liquor stores and banned alcohol adver­tising.In the UK, those over 18 can drink in public, except in areas of towns where Public Space Protec­tion Orders are in place. Lebanon, Jordan, Morocco and Tunisia have no restrictions and alcohol is freely available in restaurants, bars and shops. Argentina, Peru, Colom­bia and Paraguay have set minimum legal drinking age. But apart from that, there are no restrictions. Agencies