A government investigation at a new $ 216 million international airport in Nepal’s second largest city found that “irregularity and corruption” by officials and MPs did not allow the contractor owned by a Chinese state to ignore his obligations and charge for work, which was never fulfilled.
In the 36-page report released on Thursday, an investigation by a parliamentary committee at the airport at Pokhara found that the CAMC engineering company of China, the construction branch of a state-owned group Sinomach, the branch, failed to pay taxes, did not finish the project for specification, and used poor quality construction, as corruption and oversight deficiency.
In 2023, the New York Times reported that CAMC had increased the cost of the project and reduced Nepal’s efforts to maintain quality control, giving priority to its own business interests. The Civil Aviation Authority of Nepal was reluctant to harass Beijing on an important project for both countries, overseeing the construction of the airport, the Times found.
Shortly thereafter, the 11 -member parliamentary committee started investigating the construction of the airport.
The International Airport in Pakhra, a tourist destination in the foothills of the Himalayas, has become a financial albatros for a poor country, serving as a careful story about the results of heavy borrowing from China for major infrastructure projects.
The airport was built with a 20-year loan from the export-income Bank of China, a state-owned lender, who funds the foreign development work of Beijing. Nepal should soon start repaying the loan using the profits generated by the airport, which was opened in 2023. The airport has reduced its estimates well for international passengers. Pokhara has only one weekly international route landing.
China celebrated the construction of the airport as the “Flagship Project” of its Belt and Road Initiative, President Xi Jinping’s Signature Infrastructure Campaign, which has excluded $ 1 trillion estimated in loans and grants to other countries.
But Nepal has quietly rejected that designation, as the region has diplomatic relations with rival towards India, its neighbor and China for influence. India, a major destination for Nepali passengers, has not approved any international routes to Pokhara.
In August, Nepal’s Communist Government, under the leadership of KP Sharma Oli, who has close ties with Beijing, formally requested that China converted a loan of $ 216 million airport into grants. Nepali officials have expressed optimism about the request, but no formal announcement was made about an agreement when Mr. Oli met Mr. Xi in November.
The Parliamentary Committee report found that CAMC failed to complete the work of excavation, refilling and gravel in the runway, as well as other major components of the airport despite a contract that it was necessary to do so. It was also found that the construction firm received payment for the aspects of the project that was never made, including fuel supply facility and a heating, ventilation and air conditioning systems. In some of the cases, Nepal’s Civil Aviation Authority was forced to pay for goods that were promised by CAMC.
The report also stated that Nepali officials waived $ 16 million in taxes for CAMC, despite the contract that the company was forced to pay customs duties and value -added taxes on equipment imported from China.
The contract called two runways for takeoff and landing. However, the airport effectively has only one operating runway, as the second runway is closed due to security reasons, the report states.
China’s Foreign Ministry and CAMC did not immediately respond to the remarks requests.
“This is a great measure of corruption,” Rajendra Lingden said, who led the investigation. “Corrupt bureaucrats and politicians involved in this scam should be punished.”
The Parliamentary Committee called for suspension of top officials at the aviation agency, including its current Director General, citing the risk that they could destroy documents related to the construction of the airport.
A spokesman for Nepal’s aviation agency refused to comment on the findings of the investigation.
Claire Fu Contributed to Reporting from Seoul.
