Pokhara Airport’s Corrupt Landing

A parliamentary subcommittee of the House of Representatives’ Public Accounts Committee (PAC) has delivered a damning indictment of the Pokhara International Airport (PIA) project, confirming widespread irregularities and corruption amounting to billions of rupees. The 12-member subpanel, formed nearly ten months ago and led by Rastriya Prajatantra Party (RPP) Chairman Rajendra Lingden, has unearthed significant financial misconduct in both the construction process and the granting of tax exemptions to the involved construction companies.  

According to Prem Ale, a member of the subcommittee, the identified corruption and irregularities are estimated to be around Rs 14 billion based on the current US dollar exchange rate. The subpanel’s draft report, now finalized, details a litany of issues, highlighting at least a dozen instances of potential corruption and mismanagement.  

One of the key irregularities identified pertains to the suitability of the construction site’s soil. The initial project report allegedly indicated that the existing soil was inadequate for airport construction, necessitating an increase in the runway’s elevation. Consequently, a substantial sum of approximately $5.5 million was reportedly allocated for the transportation of soil and pebbles from locations at least five kilometers away. However, the subcommittee’s investigation has found no evidence that any soil was actually brought in from external sources, raising serious questions about the expenditure of these funds.

Furthermore, the subcommittee’s study revealed a significant deviation from the agreed-upon runway elevation. The original agreement stipulated that the runway’s height should be between 2,677 and 2,674 feet above sea level, requiring the filling of sand and pebbles to achieve this. Contrary to this agreement, the investigation found that the runway was constructed at a significantly lower elevation of 2,636 feet above sea level. This blatant disregard for the contractual terms raises concerns about the structural integrity and safety standards of the airport.  

Adding to the financial irregularities, the subpanel highlighted massive corruption in the form of tax exemptions granted to the construction companies. “Despite the clear stipulation in the contract agreement that the construction company would be responsible for paying all taxes, various governments have exempted taxes worth a staggering Rs 2.2 billion,” stated Ale, emphasizing the gravity of the situation. “This is a serious matter that warrants thorough investigation and accountability.”

The subcommittee’s report directly implicates the Civil Aviation Authority of Nepal (CAAN), the government body responsible for overseeing the airport’s construction, in the identified corruption and irregularities. The panel has concluded that CAAN was directly involved in the financial misconduct and mismanagement. As a preliminary measure, the subcommittee has recommended the immediate suspension of Pradeep Adhikari, the current Director General of CAAN, to facilitate further investigation. Notably, Adhikari served as the head of the Pokhara airport project from 2014 to 2017, a crucial period in the project’s development.  

The Lingden-led panel has not stopped at the current leadership of CAAN. The report also recommends investigations against former Director Generals of the authority, Sanjeev Gautam and Rajan Pokharel, for their roles during their respective tenures overseeing the project. Additionally, the subcommittee has called for the suspension and subsequent investigation of Binesh Munakarmi, the project head, and Baburam Poudel, a director at CAAN.  

Furthermore, the scope of the recommended investigation extends to officials involved in national pride projects, including Chandmala Shrestha and Prabin Neupane, directors of these projects, and its administrative chief, Rajendra Prasad Poudel.  

While the parliamentary subcommittee has meticulously documented the irregularities, it acknowledges its limitations as an investigative body. “As the House panel is not an investigating body, it will recommend the Commission for Investigation of Abuse of Authority (CIAA) conduct a detailed probe into the matter,” stated Ekram Giri, the secretary of the PAC. This referral to the anti-corruption watchdog underscores the seriousness of the findings and the need for a comprehensive legal investigation.  

Despite the near completion of the draft report, not all members of the subcommittee have yet endorsed it. Tara Tamang Lama, another member of the committee, acknowledged the findings of irregularities and arrears but stated, “Yes, we have found some irregularities and some arrears. However, I and some others too have not signed it as we are yet to come to a final conclusion. We are yet to properly study the report.” This indicates that while the majority of the panel agrees on the preliminary findings, further internal deliberations are still ongoing.  

Once the Lingden-led panel formally passes the report, it will be presented to the full Public Accounts Committee for endorsement. Following the PAC’s endorsement, the committee will then make its final decisions and recommendations to the government.

The Pokhara International Airport, spread across a sprawling 3,899 ropanis (198.36 hectares), commenced construction in the fiscal year 2015-16. Initially slated for completion by the fiscal year 2018-19 at an estimated cost of Rs 22 billion, the project faced significant delays, pushing the completion timeline back by two years to the fiscal year 2020-21. This delay also resulted in a substantial cost overrun, with the total project cost ballooning to Rs 25.34 billion.  

The project was largely financed through a $215.96 million soft loan secured from China EXIM Bank in March 2016 and was implemented under an Engineering, Procurement, and Construction (EPC) model.  

The formation of the parliamentary subcommittee on June 28 last year was a direct response to mounting complaints and concerns raised from various sectors regarding alleged corruption and irregularities in the airport’s construction. The subcommittee comprised a diverse group of lawmakers, including Arjun Narasingh KC, Gokul Prasad Baskota, Janardan Sharma, Tara Tamang Lama, Teju Lal Chaudhary, Deepak Giri, Dev Prasad Timilsina, Prem Ale, Ram Krishna Yadav, Rukmani Rana Baraili, and Lekh Nath Dahal.

Interestingly, a separate parliamentary committee, led by CPN-UML lawmaker Yogesh Bhattarai, was formed on the same day to investigate potential corruption in the Gautam Buddha International Airport in Bhairahawa. This parallel investigation underscores the broader concerns surrounding transparency and accountability in Nepal’s major infrastructure projects. The Bhattarai-led panel has yet to finalize its report.

The report submitted by the subcommittee marks a significant step in uncovering the truth behind the Pokhara International Airport’s troubled construction. While the airport was officially inaugurated on December 29, 2022, and commenced domestic flight operations in January 2023, it has yet to see regular international flights, operating only a limited number of chartered services. The subcommittee’s findings are expected to provide crucial insights for the government’s future decisions regarding the airport’s operation and the need for stringent action against those found guilty of corruption and mismanagement. The detailed revelations of financial irregularities and procedural violations paint a concerning picture of the project’s execution and highlight the urgent need for accountability to ensure the responsible use of public funds in future infrastructure endeavors.