KATHMANDU: As the Commission for the Investigation of Abuse of Authority’s (CIAA) probe into the Pokhara International Airport corruption case approaches its final stage, revelations of economic irregularities and technical deficiencies have emerged, casting a shadow over the entire construction process.
The coordination between Civil Aviation Authority of Nepal (CAAN) and the Chinese contractor company CMC has been called into question, highlighting systemic issues in the airport’s development.
Despite its designation as an international airport, the project, largely limited to domestic flights, has become a financial burden for Nepal, sources at the CAAN said.
On March 24, 2024, the Division 7 of the CIAA issued a request for 17 points of information from the Director General of Civil Aviation Authority of Nepal.
Compliance was expected by April 2, with all requested documents duly provided.
With the meticulous scrutiny of evidence and statements underway, the CIAA is poised to pursue legal action.
However, China’s keen interest becomes evident as the authority moves closer to prosecution.
As the investigation progressed, the discrepancies unearthed underscore the urgency of holding accountable those responsible for potential malpractice in the Pokhara International Airport project.
Sources reveal that the Chinese Embassy in Kathmandu has been lobbying against legal proceedings, exerting political pressure through channels including the Prime Minister and CPN-UML leaders.
Despite the coercive tactics, CIAA Chief Prem Kumar Rai remains steadfast in pursuing justice, undeterred by political interference.
Reports suggest Prime Minister Pushpa Kamal Dahal’s recent meeting with Rai underscores the gravity of the situation.
Meanwhile, retired secretary Kewal Bhandari’s statements, alongside those of other officials, have been meticulously documented.
However, the CIAA remains undecided on whether to summon the then finance minister and other political figures due to ongoing political pressures.
As statements from key figures, including Director Generals of CAAN and high-ranking officials of the Chinese company, are finalized, preliminary conclusions indicate widespread corruption and detriment to Nepal’s interests.
Notably, the absence of Chinese company officials during statements has prompted the CIAA to summon them via email, signaling its unwavering commitment to uncovering the truth.
Despite the contractual agreement of US$ 244 million 40 thousand 450 with China CMC Engineering Company for the construction of Pokhara International Airport, the CIAA’s investigation reveals that only 20 million 9 million 23 thousand 360 has been disbursed until July 2022.
Shockingly, the contract fails to stipulate the builders’ responsibility for taxes, fees, and charges, both domestically and internationally.
Consequently, upon commencing the investigation, CAAN has suspended compensation payments.
Furthermore, the Pokhara International Airport project, contrary to the agreement, has been granted exemptions from customs duties, tariffs, and value-added tax totaling 2 billion 224 million 16 thousand 202 rupees.
This unauthorized inclusion in the master list has reportedly favored the contractor, raising concerns about fairness and transparency.
In its inquiries, the CIAA has demanded comprehensive details from involved parties.
The first point seeks contact information for the CEO of China CMC Engineering, former general directors TR Manandhar, Rajan Pokharel, Ratish Chandralal Suman, and Sanjeev Gautam, along with consultants and team leaders.
Additionally, it requests insight into the steps leading to the contract award.
Subsequent points delve into the approval process, including documentation of opinions from previous officials, approval by the Board of Control (BOC), and ministry-level endorsement.
Details of the design report, approval authorities, and completion status of construction work are also sought, underscoring the authority’s thorough investigation.
Pointedly, the CIAA requested information on tender document preparation, contract agreement certification, and the individuals involved, signaling a meticulous examination of the procurement process.
As the investigation progressed, the discrepancies unearthed underscore the urgency of holding accountable those responsible for potential malpractice in the Pokhara International Airport project.
The CIAA’s scrutiny extends to infrastructure specifics, as highlighted in point number 11, which demands information on the current runway level and analyses supporting decisions regarding the continuation of operations at the old Pokhara Airport.
In point number 2, alongside the opinion of the former director general and other pertinent officials, aside from the current director general’s viewpoint, their comments, and accompanying documents, China CMC Engineering has been requested to furnish comprehensive details regarding the procedural stages preceding the awarding of the airport construction contract.
Point number 3 of the letter specifies the submission of the approved comments file prepared by the updated Board of Commissioners (BOC), along with confirmation of ministry-level endorsement if applicable.
Similarly, point no. 4 outlines the sequential processes leading up to the selection of China CMC Engineering for the airport construction contract.
Point no. 5 stipulates the provision of a detailed design report, inclusive of the identity of the approving official, alongside any accompanying authorization letters or decisions.
Similarly, in point number 6, completion status of China CMC Engineering’s construction endeavors, the expiration date of the Defects Liability Period (DLP), and details regarding outstanding payments to construction contractors are requested.
Additionally, point number 7 solicits the names, addresses, emails, and mobile numbers of the individuals involved in the preparation, review, and endorsement of tender documents and contract agreements for the Pokhara Airport project, alongside certified copies of the issued bidding documents.
As the investigation into the Airport corruption case progresses, the CIAA has issued a series of inquiries shedding light on various aspects of the project’s execution and management.
In point number 8, the CIAA has requested the business plan for Pokhara International Airport, along with explanations regarding the inability to repay the loan obtained from the Chinese government using airport revenue.
Additionally, detailed information on financial resources allocated for loan repayment and additional construction endeavors is sought, emphasizing transparency in financial management.
Likewise, point number 9 delves into efforts to attract international flights to Pokhara post-construction, seeking details of initiatives taken to divert various international flights to the airport.
Leakage problems in the terminal, incomplete construction of essential structures such as the access road gate and security building, and neglect of environmental considerations are among the key concerns.
Similarly, point number 10 seeks clarification on the types of international aircraft permitted to operate at Pokhara International Airport, along with reasons for current operational limitations and proposed measures for improvement.
The CIAA’s scrutiny extends to infrastructure specifics, as highlighted in point number 11, which demands information on the current runway level and analyses supporting decisions regarding the continuation of operations at the old Pokhara Airport.
Legal compliance is also under review, with point number 12 focusing on adherence to the Public Procurement Act and Regulations during airport construction.
Further inquiries include certified reports of investigations into incidents such as the Yeti Airlines accident (point 13), details of soil cutting contracts (point 14), and job descriptions of staff officers involved in airport construction (point 15).
Safety considerations are paramount, as evidenced by the request for safety audit reports and improvement directives in point number 16.
Lastly, the CIAA has sought clarification on discrepancies outlined in the Pokhara International Airport General Accounts Inspection report (point 17), emphasizing the need for resolution and accountability.
Despite the Airport’s handover to the Chinese contractor company in December 2022, concerns persist over the expiration of the Defects Liability Period (DLP) and non-payment requests from the foreign contractor.
The CIAA’s decision to halt payments amid investigations underscores its commitment to thorough scrutiny and accountability in the face of alleged malpractice.
Further scrutiny reveals dubious practices employed by the contractor, including the improper disposal and reuse of excavated soil, ostensibly to cut costs and evade transportation expenses.
The appointment of 78-year-old British engineer Keith Kidderson, by paying 3 million rupees per month, underscores the seriousness with which the authorities are addressing concerns surrounding Pokhara Airport’s construction.
Kidderson’s role in meticulously assessing the airport’s design and construction process has revealed critical shortcomings plaguing the project.
Despite the hefty investment, Kidderson’s preliminary report highlights several alarming issues.
Leakage problems in the terminal, incomplete construction of essential structures such as the access road gate and security building, and neglect of environmental considerations are among the key concerns.
Moreover, the absence of a properly designed flight procedure prior to construction commencement raises questions about the project’s feasibility and safety measures.
Disturbing revelations emerge regarding the manipulation of the runway’s height, a fundamental aspect of airport design.
Kidderson’s investigation exposes discrepancies in the runway’s construction, which was inexplicably lowered by 20 feet below the natural ground level.
Funds allocated for procuring construction materials were allegedly embezzled, with soil sourced locally instead of from designated sites, resulting in significant financial losses estimated at one billion Nepali rupees.
This deviation not only compromises safety standards but also indicates malpractice in handling construction materials.
Further scrutiny reveals dubious practices employed by the contractor, including the improper disposal and reuse of excavated soil, ostensibly to cut costs and evade transportation expenses.
Such shortcuts jeopardize the integrity of the infrastructure and raise concerns about regulatory oversight.
The mismanagement extends beyond construction to coordination failures between government agencies, as evidenced by conflicts arising from water tank capacity adjustments and hill height alterations.
These inefficiencies result in additional expenses and resource wastage, further undermining the project’s credibility.
Of grave concern is the impact on flight operations, particularly for aircraft like the Airbus 320, which faces payload penalties due to the runway’s compromised height.
Such shortcomings not only compromise operational efficiency but also pose significant safety risks for both domestic and international flights.
As Kidderson’s investigations continue to unravel systemic flaws and irregularities, urgent corrective measures are imperative to salvage the integrity and functionality of Pokhara International Airport.
Swift action is necessary to address the identified shortcomings and ensure compliance with international aviation standards, safeguarding both passengers and public resources.
The Pokhara International Airport construction saga reveals a litany of corruption and mismanagement, casting a shadow over the integrity of the project.
Investigations by the Authority unearth grave irregularities, underscoring a systemic failure to adhere to proper procedures and ethical standards.
Despite massive investments, the Pokhara International Airport’s operational performance falls short, with only a handful of international flights recorded annually.
One egregious finding points to corruption in the runway construction, where discrepancies in height deviate from natural topography, implicating foul play.
Funds allocated for procuring construction materials were allegedly embezzled, with soil sourced locally instead of from designated sites, resulting in significant financial losses estimated at one billion Nepali rupees.
Moreover, the airport’s design deficiencies severely hamper its operational capacity, rendering it inadequate for accommodating Boeing 737 or Airbus 320 narrow-body aircraft at full capacity.
Such shortcomings not only compromise safety but also impede the airport’s potential as a regional hub.
Further scrutiny reveals irregularities in procurement processes, with inflated prices for vehicles and consulting services indicating blatant corruption.
The opacity surrounding consulting expenses, coupled with exorbitant agreements made outside established protocols, further erodes trust in the project’s integrity.
Transparency concerns extend to the project’s inception, with discrepancies in cost estimates and tendering processes suggesting a lack of due diligence.
The decision to award the construction contract to a Chinese company, despite inflated proposals, raises questions about the integrity of the bidding process and government oversight.
As tensions escalate, the need for transparency, accountability, and swift resolution becomes increasingly urgent to prevent further deterioration of bilateral relations and uphold the integrity of the construction process.
Despite massive investments, the Pokhara International Airport’s operational performance falls short, with only a handful of international flights recorded annually.
This dismal outcome underscores the project’s failure to deliver on its promise of bolstering regional connectivity and economic development.
In light of these damning revelations, urgent action is imperative to address systemic corruption and rectify the airport’s shortcomings.
Accountability measures must be enforced, and transparent processes instituted to restore public trust and salvage the project’s credibility.
Only through decisive action can the Pokhara International Airport project be salvaged and its potential as a vital transportation hub realized.
The involvement of the Chinese Embassy in Kathmandu adds another layer of complexity to the Pokhara International Airport debacle.
Their diplomatic note to the Nepal government regarding payment delays underscores simmering tensions surrounding the construction process.
The embassy’s communication regarding the expired period for Nepal to receive 15 percent of the agreed-upon amount signals a breach of contractual obligations, intensifying the dispute.
However, the reluctance of employees in CAN’s accounting branch to sign off on payments, fearing investigation, highlights the pervasive atmosphere of apprehension and suspicion surrounding the project.
This impasse further complicates an already contentious situation, with diplomatic channels becoming entangled in the web of allegations and investigations.
As tensions escalate, the need for transparency, accountability, and swift resolution becomes increasingly urgent to prevent further deterioration of bilateral relations and uphold the integrity of the construction process.
What foreign affairs experts have to say:
Commenting on the issue, Vijay Kant Karna, former Ambassador to Denmark, said, “There has been corruption involved since the initial phase of building the airport.”
“To be candid, corruption was evident right from the contract signing phase, with an inflated amount. Originally slated at $160 million, the contract was eventually signed for $216 million USD, indicating a significant level of corruption. Additionally, there’s a notable absence of environmental assessments and a concerning lack of quality work,” Karna emphasized.
“It’s evident that the construction work hasn’t adhered to proper standards,” Karna told Khabarhub, further noting, “This raises questions about whose interests the airport construction truly serves and which country, Nepal or China, stands to benefit.”
“In reality, I fail to discern any logical justification for the construction of Pokhara Airport. It appears that the airport’s development is beyond the control of the Government of Nepal,” Karna remarked.
“Furthermore, the decision to secure a loan from China for airport construction while awarding the contract to a Chinese company raises eyebrows,” Karna added.
“The CIAA should thoroughly investigate the political leadership’s motives behind the airport’s construction and the selection of a Chinese company for the contract,” he said.
Meanwhile, foreign affairs expert Arun Subedi, stated, “In fact, there are significant grounds for suspicion of corruption during the construction of the airport.”
Subedi, who is also the foreign affairs advisor to former Prime Minister Sher Bahadur Deuba, added that costs have been highly inflated.
He further stated that the debtor, borrower, and contractor have all arranged covert benefits, making all parties subject to investigation.
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