Purushottam Khanal, the chairman of Nepal Telecommunications Authority (NTA), who has been facing allegations of irregularities in the purchase of Telecommunication Traffic Monitoring and Fraud Control System (TERAMOCS) and purchase of Mobile Device Management System (MDMS), has officially resigned. He also resigned due to disagreements with the government on some policy issues. Minister for Communication and Information Technology Rekha Sharma said that the cabinet meeting accepted Khanal's resignation on Tuesday.

His difference of opinion with the government was rising as he had different views and stances on installing the purchased TERAMOCS, Ncell share purchase and sale, and the provisions of the draft of the bill to amend the Telecommunications Act, 2079 BS that would benefit the private sector telecommunication service provider company Ncell.

Khanal tried to implement TERAMOCS anyhow. There was a dispute between the secretary and the minister not only in the purchase of TERAMOCS, but also in its installation.

After the government backed away from installing TERAMOCS, Khanal insisted that it should be installed at any cost. Because of this, the dispute between him and the government increased. He also seriously disagreed with the government's draft to amend the Nepal Telecommunications Act, 2079 BS.

Prime Minister Pushpa Kamal Dahal and Nepali Congress President Sher Bahadur Deuba, the main ally of the ruling coalition, wanted to amend the Telecommunications Act to support the private sector telecommunication company Ncell, but Khanal stood as an obstacle.

"From last February, differences between the chairman of the NTA, Purushottam Khanal and the government started on various issues. He resigned with seven months of his term still remaining. The main point of contention is the bill to replace the Telecommunications Act, 2053 BS and the issue of installing TERAMOCS,” said an employee of the NTA. The government led by KP Oli appointed Khanal as the chairman of the NTA for five years on July 22, 2019. He resigned on Tuesday.

Even though a complaint was filed with the Commission for the Investigation of Abuse of Authority (CIAA) regarding irregularities in the purchase of TERAMOCS, Khanal tried to implement it. But Khanal was stopped when Prime Minister Dahal told him not to implement it.

The NTA removed a provision, which stated that the ownership of private sector telecommunication companies would revert to the Government of Nepal after 25 years' from the bill aimed at amending the Telecommunications Act before sending it back to the Ministry of Communications and Information Technology (MoCIT). Khanal expressed his disagreement over this saying that the initial draft seemed biased toward benefiting private telecommunication service providers. Khanal consistently communicated to ministry officials and Prime Minister Pushpa Kamal Dahal their stance against exempting Ncell in this manner.

After canceling the provision of the current 25-year license period in the draft and trying to give it an indefinite period of time so that it will not be canceled until it is renewed, he even threatened to reveal the misdeed by saying, "The draft made in Japan and Singapore should not be implemented, I will not support it."

Because of this, his differences with the government were growing. He was called before the Parliament's Public Account Committee (PAC) after the TERAMOCS procurement controversy. In the committee meeting, he argued that TERAMOCS should be installed anyhow and that the state would get millions of rupees in revenue by installing it.

When the investigation process started by the CIAA reached its final stage, the PAC also asked to finish the investigation on this matter soon, saying that the procurement process lacks transparency, and there was a scam of Rs 1.5 billion in the procurement of Rs 3 billion.

"The CIAA's investigation was almost complete, we are also reviewing the documents from the Public Accounts Committee," the CIAA source said. The PAC has concluded that the TERAMOCS purchase agreement mentioned payment in dollars and at least Rs 500 million of tax was evaded when the local currency was converted into dollars.

The TERAMOCS procurement process was started in October 2017 when the current Health Minister Mohan Basnet was the Minister for Communications. During the time of the subsequent communications ministers Gokul Baskota, Parbat Gurung, Nainkala Thapa, the process did not proceed. The procurement process was completed when Nepali Congress leader Gyanendra Karki became the Minister for Communications.

Basnet, Karki, the then Secretary of the Ministry of Communications Baikuntha Prasad Aryal (now the chief secretary), the then joint secretary of the Ministry of Communications Binod Prakash Singh (now the secretary of Ministry of General Administration), Under Secretary Mukunda Sharma, Section Officer Durga Lamsal, Chairman of the NTA Khanal (resignation accepted on Tuesday), Deputy Director Achyut Nanda Mishra and others have been brought under investigation.

Khanal is also accused of being involved in irregularities in MDMS purchase and installation. The investigation committee of the MoCIT has shown that there are irregularities in this case. Similarly, he is also accused of being involved in the asset management of Smart Cell along with royalties with internet service providers.