Nepal investigating new international airport in Pokhara made by China

By Daisuke Wakabayashi, Bhadra Sharma & Claire Fu

As developing countries weigh the consequences of borrowing heavily from China for major infrastructure projects, anti-corruption officials in Nepal have begun an investigation into a flagship airport financed and built by Chinese state-owned companies.
 

Nepal’s $216 million international airport in Pokhara, the country’s second-biggest city, opened in January. China agreed to provide loans to build the airport more than a decade ago. Nepal tapped China CAMC Engine- ering, the construction arm of a state-owned conglomerate, Sinomach, as the contractor. The airport has failed to attract any regular international flights, raising concerns about whether it will generate enough revenue to repay loans to its Chinese lenders. Nepali officials have asked Beijing to change the loans into a grant to ease the financial burden, but China has not agreed to do so. 
 

 

Last month, The New York Times reported that CAMC had inflated the cost of the project and undermined Nepal’s efforts to maintain quality control, putting a priority on its own business interests. Nepal’s Civil Aviation Authority, the agency overseeing the airport’s construction, did not put up much resistance — reluctant to upset Beijing on an important project for both countries.
 

Shortly after the article’s publication, Nepal’s Commission for the Investigation of Abuse and Authority raided the Pokhara offices of the Civil Aviation Authority and seized documents related to the project.
 

Bhola Dahal, a spokesman for the anti-corruption agency, confirmed that an investigation into the airport was underway but declined to elaborate, noting that it was still in the preliminary stages. 
 

The investigation is the latest black eye for China’s overseas infrastructure projects, which face criticism for costly and poor-quality construction that leaves borrower countries awash in debt. Beijing has declared the Pokhara airport the “flagship project” of its Belt and Road Initiative with Nepal. 
 

Nepal, one of the poorest countries in Asia, had sought to build an international airport in Pokhara since the 1970s in the hopes of turning the city into a tourist destination. 
 

Jagannath Niroula, deputy director general at the Civil Aviation Authority, said anti-corruption investigators had spent two or three days in Pokhara looking into the airport’s construction quality.
 

A few engineers who had worked on the airport told investigators that building quality had been compromised and that the project’s infrastructure was not sound, said two people familiar with the investigation, who did not have permission to speak publicly on the matter.
 

 In a statement, China’s Ministry of Foreign Affairs said it was not aware of an investigation into the airport, but noted that it had always required Chinese firms operating abroad to comply with local laws and regulations. The ministry said CAMC “strictly implemented quality standards and kept complete records during the construction process.” CAMC did not respond to requests for comment about the investigation.