In a rare move, Nepal accuses China CAMC Engineering and local officials of collusion over inflated costs for a Belt and Road airport project in Pokhara.
A Landmark Anti-Corruption Case in Nepal
Nepal’s anti-corruption watchdog has filed charges against 55 individuals, including five former ministers and senior Chinese executives, accusing them of colluding to inflate construction costs of the Pokhara International Airport by $75 million. The airport, opened in 2023, was touted as a “flagship project” under China’s Belt and Road Initiative (BRI) but has quickly become a symbol of controversy and financial distress.
The investigation found that China CAMC Engineering Company, a subsidiary of the Chinese state-owned Sinomach, worked with Nepali officials to artificially raise costs by over 40%, sidestepping standard bidding procedures and manipulating the procurement process.
China’s Belt and Road Faces Rare Legal Pushback
While Chinese-funded infrastructure projects have long faced criticism for shoddy construction, opaque contracts, and debt risk, it is rare for a recipient country to legally challenge a Chinese state-owned firm.
The case, led by Nepal’s Commission for the Investigation of Abuse of Authority (CIAA), is one of the largest corruption prosecutions in Nepal’s history. It accuses top Chinese executives, including Wang Bo (chairman) and Liu Shengcheng (regional manager), of acting with “malicious intent” to inflate the project cost — even before bidding formally began.
“They had already set an unnatural price… in violation of existing law,” said the CIAA in its 33-page charge document.
A Non-Functional Airport and a Mounting Debt
The $250 million Pokhara Airport was funded by a 20-year loan from the Export-Import Bank of China. The loan was to be repaid using revenues generated by international air traffic — but nearly two years after opening, the airport has no scheduled international flights.
This revenue shortfall has turned the project into a financial burden for Nepal, one of Asia’s poorest nations, raising alarms over unsustainable Chinese loans and the viability of BRI infrastructure investments.
Nepal’s previous government even appealed to China to convert the loan into a grant, though that request remains unanswered.
Political Fallout and Multilateral Involvement
The case cuts across Nepal’s political spectrum, with ministers from the Nepali Congress, the CPN (UML), and the Maoist Centre among those charged. It follows months of anti-corruption protests, which contributed to the collapse of the previous government.
The charges are also likely to strain Nepal–China relations, according to experts.
“It is no longer the old Kathmandu where you do a closed-door deal,”
said Akhilesh Upadhyay, policy lead at the Institute for Integrated Development Studies in Kathmandu.
The commission is also investigating:
- An illegal tax exemption reportedly granted to China CAMC Engineering
- Improper payments for construction services and consultancy fees that should have been covered by the Chinese side
Belt and Road Under Global Scrutiny
This case adds to growing concerns about China’s BRI projects, which have been criticized for:
- Lack of transparency and accountability
- Debt traps in low-income nations
- Favoritism and corruption involving local elites
The Pokhara Airport is now a high-profile example of how BRI deals can go wrong — and how recipient countries are beginning to push back.
What Happens Next?
The case is expected to go before a special anti-corruption court in the coming months. Chinese officials involved who are not in Nepal will be summoned publicly. Whether China CAMC Engineering responds — or whether Beijing intervenes — remains uncertain.
Observers say this may mark the start of a new era of accountability in South Asia’s dealings with Chinese state-owned enterprises, and may also influence future negotiations with Beijing across the region.
