The delay of the authority to recover 40 crores from the state, which UTL has been operating for 5 years

Kathmandu. The regulator has shown delay in recovering Rs 400 million from the state and its interest and penalty, which the telecommunication company UTL and its partner Teleinfra Nepal have been operating for more than five years. Three months have passed since the final verdict on this matter, which has been entangled in the court process for a long time, has been observed by the regulator Nepal Telecommunication Authority to remain silent.

UTL sold the contract to Teleinfra Nepal under the name of JV, which was obtained in a collusion for the construction of the National Information Highway on Madhyapahari Lokmarg. The contract was given to the bankrupt company for two billion and one crore rupees.

But based on the bank guarantee submitted by Teleinfra Nepal, which is trying to participate as a JV, the authority refused to give advance payment. The Patan High Court issued an order to the company, which had filed a case against the authority's decision, to allow it to carry out the work as per the agreement.

Meanwhile, the Cabinet meeting decided to cancel the contract with UTL and proceed with Nepal Telecom. However, the Authority had released 400 million rupees as mobilization advance on 7 February 2075 in the name of Teleinfra Nepal citing the court order as the reason.

But after the company showed no progress for a few months of the contract, the authority decided not to extend the contract period and confiscate the bank guarantee. Due to the order issued after the company filed a case against the said decision, the company has been arbitrarily misappropriating Rs. 402.2 million for advance payment.

On January 23, the single bench of the Supreme Court Judge Abdul Aziz Muslim gave the final judgment in this case and opened the way for the authority to proceed with the process of canceling the contract and confiscating the bank guarantee. But even after three months have passed since the Supreme Court's decision, the authority has not taken a decision to confiscate the bank guarantee and impose interest penalty on the advance payment amount.

According to authority sources, a month has passed since the full text of the Supreme Court's decision has arrived. “If desired, the authority could have started the process of confiscating the bank guarantee for the advance payment based on the summary of the judgment and charging the company with an interest penalty of 402 million five years and three months,” said a high-level employee of the authority, “but even when the full text of the judgment comes out. The absence of a decision on the matter is itself a mystery.”

However, it is understood that the chairman of the authority, Bhupendra Bhandari, has asked the concerned branch to raise comments on the confiscation of bank guarantees. But the sources said that the employees are in a quandary due to confusion over whether to impose interest penalty on the advance payment amount or not.

How much is loan and interest?

Two percent of the annual income from telecommunication service providers has been deposited in the Rural Telecommunication Development Fund. But those service providers will have to pay two percent monthly interest as a penalty if they pay such amount only one month late. In this way, even if the same funds are misappropriated by the operators of Teleinfra Nepal and UTL, interest and fines can be imposed at the rate of two percent per month, said an expert in the authority's affairs.

The annual interest rate of 40 million 20 million rupees comes to 26.82 percent. According to that calculation, the loan and interest amount of the said amount in the first year will be 500 million 98 million 33 thousand 284 rupees. Thus, in the period of five years and three months, the authority should recover a total of Rs. But it is understood that the authority is confused about whether to charge simple interest or not.

By December 2079, the company had to pay around five billion 31 crore rupees to the government in terms of royalty, rural telecommunication development fund, frequency fee, installment of basic telecommunication service renewal fee and penalty for failure to work according to the terms of the license.

Since then, at least the seventh and eighth installments of the renewal fee amounting to two billion 75 million, frequency fee of eight million four million have been added.

Service providers have to contribute two percent of their annual income to the Rural Telecommunication Development Fund. Even if the amount is delayed by one month within the stipulated time, the service provider will be charged a penalty of two percent per month. In such a case, it is not fair to charge interest less than that rate to those who take the cash amount of the same fund.

Therefore, in addition to this, the 400 million rupees taken in the name of mobilization advance from the Rural Telecommunication Development Fund for a month at the rate of two percent per month for five years and three months comes to about one billion and 34 million rupees. By doing all this, it seems that the state has to recover about 9 billion 48 crore rupees from UTL. Not only this, but the radio frequency of the telecommunication service, which is a limited national heritage, has been 'held' in the name of the company for years, and the state and the people have lost the benefit from its use.

What is this case?

Although the license of the network service provider was obtained, Nepal Infra and Communication did not put the service into operation. The company was established only to purchase the project contract that UTL got from the then Authority Chairman Digambar Jha.

In May 2074, UTL won a subsidy contract of two billion one crore rupees on the condition of expanding the 'backbone network' in all the districts of Gandaki and Lumbini provinces. However, later UTL started trying to advance the project as a joint venture (JV) with 49 percent of a private company called 'Nepal Infra' and 51 percent of its own investment against the rules.

The authority also approved it through Deputy Director Achutananda Mishra. Which was legally illegal. However, the then leadership of the authority and the mafias involved in UTL and Nepal Infra pulled out the trick of legalizing it from the court. Accordingly, the authority dramatically took the stand of not giving advance payment for the project as per the approval given by it.

After that, UTL and Nepal Infra filed a writ in the court saying that they initially gave approval and later refused to pay. The commercial bench under the Patan High Court issued a deadline notice with an order on 22 Chait 2074. Within a week of that, the then chairman of the Authority, Digambar Jha, assigned Rachita Acharya, an employee working in his office, as the heir, and made him present the claim for cancellation of the registered writ in a dramatic manner.

The authority had already entered into an agreement with UTL to construct the project as per the bid. However, he established a joint venture (JV) with Nepal Infra and Communication Pvt. A letter was sent to the authority on 2nd November 2074 to approve it. Within 10 days of that, approving the application, a letter was written on behalf of the authority, under the signature of Deputy Director Mishra, authorizing the JV to do the work as per the agreement.

Whereas, before the authority called for bids for the project, there was a provision that only the companies that had obtained the permit could jointly build the project (JV). But Nepal Infra took the network service provider's license from the authority only on 25 October 2074.

As a result, the said JV itself was not lawful. While receiving the contract, UTL presented a bank guarantee of Rs. But UTL released its bank guarantee on 13 Baisakh, 2075 and accepted the bank guarantee of Nepal Infra, which was forwarded as a JV, and claimed an advance payment of 40 million two lakh rupees.

However, the authority wrote a letter in the name of UTL on 18 March 2074 and insisted that the bank guarantee of Nepal Infra, which is not even a party to the contract, cannot be given advance payment. The Patan High Court upheld the JV permission erroneously given by the authority for the subsidy project under the Rural Telecommunication Development Fund. Accordingly, UTL's bank guarantee was waived and the Authority disbursed Rs 402 million as advance payment to the JV.

Besides, the Cabinet led by KP Oli also decided to cancel the contract with UTL and give the project to Nepal Telecom. The then Communications Minister Gokul Prasad Baskota informed about it through a press conference. But the decision made public by the minister through a press conference did not formally reach the authority from his ministry. Thus, the contract period of the project has ended.

The authority decided not to extend the time as there was no work by the time it should be completed. By then, Jha had already left the leadership of the authority. UTL approached the Supreme Court against the authority's decision. The court issued an interim order in favor of UTL and Teleinfra.

A single bench of Supreme Court Justice Purushottam Bhandari passed a show cause and interim order in the name of the authority. This is the incident of 29 Baisakh 2076. In the same May, the bench of the then Chief Justice Cholendra Shamsher Jabara and Prakash Kumar Dhungana decided to request information from the authority. After that, the court process was stalled for a long time.

Thus, under the cover of the court, UTL and Teleinfra kept the project of national importance stuck for more than six years. In this way, the mafia made a quilt with Rs. The source of government revenue that will be received when the project is completed has dried up. The people were deprived of the benefits. When the central section of the information highway was uncertain, the goal of creating Digital Nepal was also affected.

Last updated: Baisakh 21, 2081 19:55

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