Nepal Charges Chinese Firm in Pokhara International Airport Case

(POKHARA, NEPAL) Nepal’s anti-graft watchdog has filed what it calls the largest corruption case in the country’s history, accusing Chinese state-owned builder China CAMC Engineering and 55 Nepali officials and businessmen of inflating the cost of the Pokhara International Airport by about $74 million, leaving the Himalayan state with heavy debt and an unfinished flagship project meant to boost tourism and trade.

The case and the alleged scheme

The Commission for the Investigation of Abuse of Authority (CIAA) lodged the case at Nepal’s Special Court in early December 2025 after years of complaints, parliamentary scrutiny, and internal probes. A project first estimated at NPR 14 billion allegedly surged to NPR 22 billion.

Prosecutors allege a web of fraudulent activity, including:

• Fake invoices and overbilling
• Fraudulent procurement
• Use of substandard materials
• Efforts to hide the true cost from the public and state auditors

The CIAA argues that what was billed as a symbol of Nepal’s partnership with China instead became a showcase of collusion and abuse of power.

Financing and contractor

At the heart of the case is a $216 million loan from China’s Export-Import Bank, signed under a 20-year agreement in 2016, to finance construction of the new international airport in Pokhara.

• The government awarded the design-and-build contract to China CAMC Engineering, part of the state-owned conglomerate SINOMACH.
• The CIAA contends that senior Nepali officials worked closely with the contractor to push up costs and weaken oversight, instead of protecting the public interest.

Who is charged

Among the 55 defendants are prominent political and bureaucratic figures:

• Former ministers: Ram Sharan Mahat, Bhim Acharya, Ram Kumar Shrestha, Dipak Amatya, and the late Post Bahadur Bogati
• Former top civil servants: Sushil Ghimire and Madhukar Marasini
• Senior officials from the Civil Aviation Authority of Nepal (CAAN)
• Representatives of China CAMC Engineering
• Former CAAN Director General Pradeep Adhikari (the CIAA has recommended his suspension)

These names reflect how widely the alleged misconduct is said to have reached across government and business.

Financial impacts and recovery sought

Investigators allege patterns of:

• Bills for work that was never completed
• Inflated prices for materials
• Manipulation of invoices and customs declarations

According to the CIAA, the scam not only drove up the airport’s price but also cheated the state out of NPR 2.2 billion (around $16 million) in taxes.

The CIAA is asking the court to recover NPR 8.36 billion—about $58 million—from the defendants, calling it the highest financial recovery claim the body has ever pursued. Officials stress this amount represents funds they believe were wrongly extracted from a loan Nepali taxpayers must now help repay.

Alleged construction failings at Pokhara airport

For residents and local observers, the Commission’s findings describe a troubled project:

• Excavation along the runway was reportedly left incomplete
• Heating and ventilation systems were not fully installed
• A key fuel supply facility was reportedly not built, despite payments processed as if it were

The CIAA says these facts are direct evidence of both substandard construction and deliberate financial misconduct tied to China CAMC Engineering’s handling of the contract.

The airport, long presented as a milestone of growing ties with Beijing, risks becoming a legal and diplomatic headache rather than a showcase of cooperation.

Political and diplomatic implications

The charges carry heavy political weight because the airport has often been discussed in relation to China’s Belt and Road Initiative (BRI)—though Nepali officials repeatedly avoided formally branding it as a BRI project.

• The case risks souring public perception of large Chinese-funded projects and raising questions about bidding standards, internal controls, and the responsibilities of contractors working with partner governments.
• While the CIAA filing does not accuse the Chinese state or the Export-Import Bank directly, naming China CAMC Engineering in a record corruption case will likely prompt scrutiny in both Kathmandu and Beijing.

Institutional oversight and accountability

Anti-corruption campaigners say the affair highlights vulnerabilities in foreign-funded infrastructure when local oversight is weak and political pressure is high. The CIAA’s case suggests multiple checks failed or were captured, including:

• Internal ministerial reviews
• Financial monitoring by CAAN

The Commission frames the Pokhara case as part of a wider push to enforce rules on procurement, taxation, and public accountability. If the Special Court upholds even part of the CIAA’s claims, it could change how future governments negotiate big-ticket loans and public works contracts.

Broader social and economic consequences

Economists warn that inflated projects like the Pokhara loan:

• Limit fiscal space for social spending (schools, health care, local job programs)
• Increase debt service burdens
• Potentially alter migration patterns, pushing more citizens to seek work abroad

The CIAA also alleges tax losses (NPR 2.2 billion / ~$16 million) that further reduce funds available for public investment.

Effects on foreign workers and migration

Large infrastructure projects typically involve foreign engineers, project managers, and technical specialists on work visas. When projects face fraud or waste allegations, those workers can be adversely affected:

• Contract cancellations
• Unpaid wages
• Legal or immigration consequences

Sites that follow global mobility issues, such as VisaVerge.com, note how high-level disputes can eventually impact ordinary migrant workers and their families.

Investigations, parliamentary scrutiny, and next steps

The Special Court case follows extended scrutiny:

• Nepal’s Public Accounts Committee raised red flags about widespread irregularities, prompting years of parliamentary hearings and internal inquiries.
• Only after these findings did the CIAA assemble a full criminal case and place it before judges.
• The Commission outlines its mandate and procedures on its official website at https://ciaa.gov.np and insists it is applying legal standards equally, whether to powerful former ministers or local officials.

For now, none of the defendants has had the chance to present a full defense in court, and the case is likely to proceed slowly. Still, having veteran ministers and senior bureaucrats listed alongside corporate representatives sends a strong political message.

Possible precedents and local concerns

Legal analysts say that if the court upholds even part of the CIAA’s claims, it could set a precedent for fresh probes into other loan-funded projects—particularly those in energy, transport, and aviation that followed similar models.

For many Nepalis, however, the priority remains practical:

• The Pokhara International Airport was expected to bring more tourists, direct international flights, and new business to the city.
• Instead, prosecutors paint a picture of unfinished work, unexpected debt, and political infighting.

Whether the case ends in convictions, acquittals, or plea deals, the way this airport came to symbolize alleged corruption as well as development will likely shape public debate over foreign-funded projects in Nepal for years to come.