As part of President Xi Jinping’s major infrastructure initiative, the Belt and Road Initiative (BRI), which promised significant investments in infrastructure projects around the world, the airport’s construction was a component of China’s ambitious objectives
In June, Pokhara, Nepal’s picturesque paradise in the shadow of the majestic Himalayas, received a Sichuan Airlines flight from China, ushering in a historic moment for the city. Finally open for business was the recently built international terminal at Pokhara’s airport, which was largely sponsored and carried out by Chinese businesses.
The complex and frightening truth that lurked beneath this ceremonial opening, according to The New York Times, underscored China’s questionable influence over infrastructure and its geopolitical competition with India.
Nepal had long wanted to build an airport in Pokhara, seeing it as a key factor in making the city a popular travel destination on a global scale.
However, the project had stalled because of political unrest, governmental obstacles, and money problems. That is, until China came in to fill the hole, advancing its efforts to forge a rival sphere of influence and posing a threat to American hegemony on the international scene. Nepal, which is adjacent to India and is situated south of China, offered an alluring geopolitical opportunity.
As part of President Xi Jinping’s major infrastructure initiative, the Belt and Road Initiative (BRI), which promised significant investments in infrastructure projects around the world, the airport’s construction was a component of China’s ambitious objectives.
Nepal, however, subtly rejected the idea that the project included the Pokhara airport. According to The New York Times, this disagreement led to a diplomatic tug-of-war at the airport between China and India.
While dozens of nations, including Nepal, gathered in Beijing for the Belt and Road Initiative’s 10th anniversary celebration, China’s international development initiatives came under fire for their high budgets and subpar workmanship. The Pokhara airport served as a prime example of the risks associated with importing China’s infrastructure-at-all-cost growth model, which disproportionately benefited Chinese businesses at the expense of the borrowing country.
The state-owned corporation Sinomach’s construction business, China CAMC Engineering, was essential to the Pokhara airport project. The airport itself was filled with Chinese-made industrial and security equipment, and it imported Chinese building materials and machines. Despite China’s assurances that the project would be of high quality, a New York Times inquiry turned up an unpleasant story.
A careful review of thousands of documents and input from numerous project participants revealed that China CAMC Engineering had repeatedly imposed terms to boost revenues and advance its objectives. It also gradually eliminated Nepali oversight at the same time. As a result, without the anticipated flood of travellers to pay back the debts, Nepal found itself deeply in debt to Chinese creditors.
Even before the official bidding process had begun in 2011, Nepal’s finance minister had signed a memorandum of understanding in favour of CAMC’s plan. Chinese companies could only submit bids for the project under the terms of the Chinese credit deal.
The initial bid from CAMC was for USD 305 million, almost double what Nepal had estimated it would cost to build the airport. Politicians in Nepal criticised this, claiming the price was exaggerated and the process was corrupted. Following the criticism, CAMC reduced its offer to USD 216 million, cutting the price by roughly 30%.
A 20-year deal was signed between China and Nepal in 2016, with a quarter of the cash coming from an interest-free loan. Nepal wanted to borrow the remaining funds at a rate of 2% from China’s Export-Import Bank, with payback starting in 2026.
As work on the project continued, obvious problems were discovered. The Chinese contractor was overseen by the Nepalese Civil Aviation Authority, however the project was hindered by the lack of skilled staff and the insufficient funding for consultants. The budget for paying consultants to make sure CAMC complied with international building standards was initially set at USD 2.8 million, but as money was diverted elsewhere, it was eventually lowered to just USD 10,000.
Due to a lack of control, CAMC was able to start construction projects before hiring consultants and complete them below international standards. The runway’s stability was jeopardised by the omission of crucial elements, like soil density studies for the runway’s foundation. Other mistakes included not taking historical rainfall data and slopes into account when designing the airport’s drainage system.
While consulting efforts were expected to oversee CAMC’s work, the Chinese company managed to sidestep consultants and interact directly with Nepali officials who had limited construction experience. Any efforts to seek additional information or documentation were often fruitless.
China’s Export-Import Bank had commissioned China IPPR International Engineering, a consulting firm, to ensure the quality, safety, and schedule of the project and to confirm Nepal’s satisfaction with CAMC’s work. However, the situation grew murkier in 2019 when CAMC acquired IPPR, turning it from a sister company into a direct subsidiary. IPPR’s fees came from Nepal as part of its loan from the Chinese bank.
Chinese engineers working on the project claimed that they were instructed not to scrutinise CAMC’s work closely, with a focus on delivering an airport rather than a “chicken farm.” Furthermore, allegations surfaced that documents related to the qualifications of IPPR’s workers in Pokhara had been falsified. In some cases, even employee credentials were manipulated. Such practices revealed a disconcerting disregard for transparency and accountability.
CAMC and IPPR remained unresponsive to inquiries and requests for comments about their involvement in the Pokhara airport project.
Yet, what went unmentioned was a tragic incident involving Zhu from three years earlier. In 2019, Zhu struck and killed a pedestrian in Pokhara following a night of drinking. Police suspected he was intoxicated when he hit Deu Kumar Tamang, who was walking in a crosswalk.
Tamang’s tragic death led to a contentious compensation offer from CAMC, starting at 1 million Nepali rupees (approximately USD 7,500). When the family declined, CAMC offered to double the payment and provide space for a coffee shop within the new airport. Eventually, the family accepted the offer, with the condition that payment would only be made after Zhu’s release from prison.
However, allegations arose that CAMC sought to downplay the incident by arguing that Tamang had been drinking and had contributed to the accident. The case went to trial, with Zhu being found guilty of a “traffic death” and sentenced to four months in prison. This sentence, considered lenient by many, was further reduced to time already served, causing outrage among the victim’s family. Nabin Tamang, Deu Kumar Tamang’s brother, expressed disappointment in the justice system, perceiving it as prioritizing the project’s progress over seeking justice.
The opening of the Pokhara airport in January 2023 was marred by geopolitical tensions. The Chinese Embassy in Nepal declared the airport as “the flagship project” of China and Nepal’s Belt and Road Initiative cooperation, despite its pre-existing status. This declaration ignited a diplomatic dispute, with India’s skepticism regarding the Chinese initiative further complicating the situation.
As Pokhara airport struggled to attract international flights, especially from Indian airlines, Nepal’s aspirations for the airport were put in jeopardy. Buddha Air, Nepal’s largest airline, had requested permits for flights to India but awaited approval from the Indian government. A feasibility study commissioned by CAMC had projected passenger numbers that would enable the airport to repay its loans from profits, but as of now, no international flights have commenced.
Nepali officials have reportedly requested that China convert the loan into a grant due to the airport’s financial challenges, a matter discussed during Prime Minister Pushpa Kamal Dahal’s visit to Beijing in late September. The joint statement issued by China and Nepal during the visit acknowledged the completion and operation of the Pokhara airport but made no mention of plans to waive the loan.
Concerns have been expressed concerning the calibre of the work, the abuse of monitoring, and the financial burden on Nepal resulting from the construction of the Pokhara airport in Nepal, which was mostly funded and carried out by Chinese businesses. It is also difficult for the airport to draw foreign flights because of its connection to China’s Belt and Road Initiative, which has sparked diplomatic controversies with India.
The Pokhara airport is a clear illustration of the dangers of adopting China’s infrastructure development model, raising questions about financial sustainability and transparency while also igniting geopolitical tensions in the region.