Corruption Allegations Surface in Pokhara International Airport Project, Involving Chinese Officials
Kathmandu, Nepal – A significant corruption case has been filed against 21 individuals, including two Chinese nationals, in connection with alleged financial irregularities amounting to Rs461.5 million (approximately $3.5 million USD) during the construction of the Pokhara International Airport. The Commission for the Investigation of Abuse of Authority (CIAA), Nepal’s anti-graft body, lodged the case at the Special Court on Sunday, marking the third legal action linked to the Chinese-funded infrastructure project.
The CIAA’s charge sheet details how a provisional sum of $2.8 million, earmarked for consultancy services under the Engineering, Procurement, and Construction (EPC) contract, was allegedly misappropriated. The original agreement stipulated that any unspent portion of this allocation should be deducted from the overall contract price.
However, the defendants are accused of circumventing these provisions. Investigations suggest that they deliberately appointed a consultancy service provider outside the established contractual framework. Furthermore, payments were allegedly channeled through a separate budget managed by the Civil Aviation Authority of Nepal (CAAN), rather than the designated consultancy fund.
Key Allegations and Financial Discrepancies:
- Misappropriation of Consultancy Funds: A contract worth Rs428.93 million was reportedly awarded to ERMC/Anot/Slate JV for consultancy services. Of this amount, Rs406.82 million was disbursed, a move deemed in violation of contractual terms and prevailing laws by the CIAA.
- Breach of Bill of Quantities (BOQ): The charge sheet further alleges that, influenced by the consultant, an updated Bill of Quantities (BOQ) was prepared in contravention of the original contract. A BOQ is a critical document in construction, detailing all materials, labor, and associated costs.
- Diversion of Funds: Under the revised BOQ, the initial $2.8 million allocated for consultancy services was drastically reduced to a mere $10,000. The remaining $2.79 million was then reportedly approved for expenditures unrelated to consultancy, and not permitted by the original contract.
- Disbursement Violations: This manipulation led to the disbursement of an additional Rs372.08 million, again in breach of procurement laws and contractual obligations.
- Total Financial Loss: The anti-graft body has calculated the total loss and misuse of public funds to the Nepalese government and CAAN at Rs461.58 million, based on the evidence compiled during the investigation.
The CIAA has asserted that these actions constitute corruption offenses as defined under Section 17 of the Prevention of Corruption Act, 2002. The commission is seeking both penalties for the accused and the full recovery of the embezzled funds.
Prominent Individuals and Entities Named in the Case:
The list of defendants includes several former high-ranking government officials and aviation authority executives. Among them are:
- Kedar Bahadur Adhikari: Former Secretary of Tourism.
- Pradeep Adhikari: Former Director General of CAAN.
- Sanjiv Gautam: Former Director General of CAAN.
- Rajan Pokharel: Former Director General of CAAN.
- Mahendra Singh Rawal: Deputy Director General of CAAN.
- Babu Ram Poudel: Deputy Director General of CAAN.
- Pravin Neupane: Deputy Director at CAAN.
- Chandmala Shrestha: Manager at CAAN.
- Binesh Munankarmi: Former Chief of the Pokhara Airport Project.
- Him Jyoti Thapa: Project official.
- Raja Ram Chaudhary: Project official.
- Narendra Raj Sainju: Official.
- Pramod Nepal: Official.
- Sabin Phuyal: Official.
The CIAA is seeking the recovery of Rs461.58 million from Kedar Bahadur Adhikari, Pradeep Adhikari, and Rajan Pokharel. Additionally, Rs89.5 million each is being sought from Sanjiv Gautam, Mahendra Singh Rawal, and Babu Ram Poudel. Yamuna Devi Shrestha, the wife of the late Dhruba Das Bhochhibhoya (a former CAAN director), is also named, with Rs67.39 million to be recovered from her.
The consulting firm, ERMC/Anot/Slate JV, and its officials – Yam Bahadur Bhandari, Uddav Raj Chaulagain, Sobendra Raj Joshi, and Pramod Dawadi – are also implicated, with the CIAA demanding the recovery of Rs461.58 million from them.
Furthermore, the primary contractor, China CAMC Engineering Co Ltd, along with its chairman Wang Bo and project manager Yang Zhigang, have been named. The CIAA is seeking Rs461.58 million in recovery from this entity and its representatives.
Previous Legal Actions Related to the Project:
This latest case follows two earlier legal actions initiated by the CIAA concerning the Pokhara International Airport.
- December 7, Last Year: The CIAA filed a substantial corruption case against 55 individuals, including five former ministers and ten former secretaries, along with a company. This case, related to alleged irregularities in the $215.96 million airport project, is considered the largest corruption case filed at the Special Court in terms of financial magnitude under a state procurement process. The CIAA sought Rs8.36 billion in recovery from each of the 56 defendants in that instance, and proceedings are currently ongoing.
- A Week Later: The CIAA initiated another case against Binesh Munankarmi, who had previously led the Pokhara International Airport project. Munankarmi was accused of amassing assets disproportionate to his known sources of income.
The CIAA has also alleged that China CAMC Engineering Co Ltd, the project’s contractor, acted with deliberate intent from the project’s inception to manipulate and secure the contract for the China-financed airport.
