In a major blow to the Belt Road (BRI) programme, Nepal has filed a corruption case in relation to massive corruption in the China-sponsored Pokhara International Airport, formally indicting Chinese contractors and consultants. The interim government led by Prime Minister Sushila Karki unearthed the systematic irregularities, unnecessary delays and manipulated pricing that occurred for over a decade. This has raised questions about the integrity of the earlier governments led by KP Sharma Oli and Pushpa Kamal Dahal ‘Prachanda’, and the public is now demanding accountability.

China CAMC Engineering acted with mala fide intent to bag the airport project, read the chargesheet filed by the Nepalese Commission for the Investigation of Abuse of Authority (CIAA). It said “The contractor, China CAMC Engineering Co. Ltd., along with other accused parties, having been awarded the contract under law, did not proceed with procurement correctly. Instead, they artificially inflated the cost estimate, raising it as high as USD 286.526 million, significantly above the originally approved amount. This indicates misuse of procurement procedure and deliberate over-pricing. As a result, there is alleged corruption and loss to the public sector.”

The Pokhara corruption case has opened a can of worms, and as a result, several other Chinese projects, especially those under BRI, in Nepal may now be set to undergo investigation, as they too have been accused of overpricing, financial opacity, and posing debt risks. “This is unprecedented. The anti-graft body filed this case only because it could function independently under the new government,” said Madan Krishna Sharma, president of Transparency International Nepal. 
A parliamentary committee set up to probe the scam about a year ago found dozens of cases of irregularities and corruption that occurred under the rule of Oli and Prachanda. “The corruption and the irregularities amount to around Rs14 billion in the current exchange rate of the US dollar,” said Prem Ale, a member of the committee. After a month-long investigation, the CIAA filed a chargesheet against 55 people, including officials of China CAMC Engineering Company, which is a construction arm of the Beijing government-owned conglomerate Sinomach. Since China provided a loan to the project, it allowed only Chinese companies to compete for the contract.

The criminal case has sent a shockwave through the political circles as the chargesheet named the Chinese contractors as well as close confidantes of former Prime Ministers Oli and Prachanda. Now demand to punish those involved in corruption is growing in Nepal. “Everyone involved must be held accountable, including international contractors. This issue should not be tied to bilateral relations … but treated purely as a corruption and governance-related matter,” said Sharma of Transparency International.

Activists, NGOs, and Nepalese youth have welcomed the criminal case in the China-built Pokhara Airport. “It is really exciting news for us. We expect many more such actions. We wish such action should be taken one day,” said Pradip Gyawali, who was a leader of the mass movement that saw countrywide protests held by Gen Z populations against corruption. The protests against the social media ban snowballed into the demand for accountability targetting corruption. 
China manipulated the procedures, violated standard procurement practices, and bribed local politicians to get the Pokhara International Airport contract, said Vijay Kant Karna, former diplomat and chair of Kathmandu-based Centre for Social Innovation and Foreign Policy. “As a result, the country has suffered greatly while political leaders and bureaucrats received kickbacks,” he said. Anil Giri, a scribe from Kathmandu, said China declared Pokhara Airport project a BRI component despite reservations from Nepal. “Now, the international media has a solid case to prove how corruption is prevailing and fuelling in BRI projects,” he said.

Several Chinese-funded projects in Nepal have been under scrutiny for delayed construction, cost escalation, and inefficiency, leading to anger and frustration from the local people in Nepal. “Most of the contracts under Chinese companies are awfully slow, or corruption has been an issue. Do they do the same in China?? Mugling- Pokhara, Nawalparasi - Butwal highway, Pokhara airport, KTM ring road, etc, just to name a few,” said Kathmandu resident Shailesh Kant.  
There are strong undercurrents that those who are related to the corruption case should not be allowed to hold any post or contest elections. “Everyone has the same demand: those who commit corruption must come under the ambit of action, and the guilty must not get impunity. The investigation must quickly be brought to a conclusion,” said Jayamukunda Khanal, former Chief Secretary of the Nepalese government. The government’s move may pose challenges for Oli and Prachanda, given that the Nepali public is now expecting genuine accountability, said journalist Tajul Islam. “As Nepal prepares for elections amid rising public anger, leaders will soon face the judgment not only of prosecutors and courts, but of a new generation determined to reshape the country’s political future,” he said. 

Pokhara corruption expose