CIAA files corruption case against Chinese contractor China CAMC in Pokhara International Airport project

KATHMANDU: Nepal’s anti-graft watchdog, the Commission for the Investigation of Abuse of Authority (CIAA), has also named China CAMC Engineering Co. Ltd., the Chinese state-linked contractor, as a defendant in the corruption case related to alleged large-scale irregularities in the construction of Pokhara International Airport.

The move places renewed international attention on Chinese-funded infrastructure projects in Nepal and raises concerns for global investors tracking governance, transparency, and project execution under China-backed lending and construction frameworks.

According to CIAA filings, the Civil Aviation Authority of Nepal (CAAN) signed the construction contract with China CAMC in 2014. Under the agreement, the Government of Nepal and China Exim Bank formally concluded a USD 216 million loan agreement in 2016, with CAMC tasked with delivering the airport as a “turnkey project.”

The Pokhara International Airport was designed with a 45-meter-wide and 2,500-meter-long runway, with China CAMC responsible for the entire scope—design, procurement, construction, and handover. As the project was financed through a Chinese sovereign loan, bidding eligibility was restricted exclusively to Chinese companies, limiting international competition.

Out of nine applicants, China CAMC Engineering was selected as the contractor. Its affiliated company, IPPR International Engineering, was appointed as the main consultant, while ERM Consultants represented CAAN. According to investigators, both consulting firms were effectively engaged to validate CAMC’s work rather than independently supervise construction standards and compliance.

The CIAA alleges that one of the key irregularities involved earthwork and material handling, a major cost component of the project. The original design required soil and gravel to be transported from a location approximately five kilometers away, which would have raised the airport’s elevation and ensured engineering specifications were met.

However, investigators say the Chinese contractor instead used soil and gravel extracted directly from the construction site. Despite this deviation, CAMC reportedly allocated around USD 8 million on paper for earthwork logistics. By sourcing materials on-site, the company allegedly avoided substantial transport costs, raising concerns over inflated project expenses and misrepresentation.

Pokhara International Airport, constructed with a Rs 21 billion Chinese loan, became operational in January 2023, but has since struggled to attract long-haul international flights, undermining tourism, aviation connectivity, and expected returns on investment.

The CIAA’s decision to charge a Chinese company alongside Nepali politicians, senior bureaucrats, and aviation officials highlights increasing scrutiny of China-funded infrastructure projects, debt-financed construction models, and procurement transparency in developing economies.

The case is being prosecuted at the Special Court, with authorities expected to disclose further technical details, financial assessments, and compliance findings as proceedings advance. The outcome is likely to carry implications for China–Nepal infrastructure cooperation, foreign direct investment (FDI), and Nepal’s governance credibility in global infrastructure and aviation development projects.