Concerns Mount Over China-Built PRIA: Auditor General’s Report Unveils Malpractices and Delays

The Office of the Auditor General (OAG) has raised serious concerns regarding the Chinese-built Pokhara International Airport, highlighting significant delays and cost overruns in its latest report. Despite being inaugurated with much fanfare by Prime Minister Pushpa Kamal Dahal on January 1, 2023, the airport has yet to see regular international flights more than a year and a half later.

Cost Overruns and Delays

The construction of Pokhara International Airport, funded by a $215.96 million soft loan from the Export-Import Bank of China, has been plagued by delays and cost escalations. The airport’s first international flight only landed on June 21, 2023, six months post-inauguration, underscoring the issues highlighted in the Auditor General’s 61st report. The report criticizes the increased construction costs due to project delays and mismanagement.

Lack of Regular International Flights

One of the most pressing issues noted by the OAG is the absence of regular international flights. “There are no regular international flights at the airport,” the report states, emphasizing the need for coordination with international airlines and neighboring countries to resolve this issue.

Allegations of Malpractice and Corruption

The report uncovers significant malpractices in the construction process, suggesting widespread corruption involving political leaders, high-level staff, and intermediaries. Key issues include contract awards exceeding cost estimates, customs and VAT exemptions amounting to over 2 billion, and the omission of essential materials like stone and clay in the runway construction, which led to structural modifications.

Customs and VAT Exemptions

Customs and value-added tax exemptions not outlined in the original contract were included in the project’s ‘master list,’ raising further questions about the project’s financial integrity. The Chief Accountant’s omission of critical materials like stone and clay necessitated a reduction in the pier height by 10 meters, revealing severe lapses in project planning and execution.

Incomplete Infrastructure

The report also highlights several infrastructural deficiencies at the airport, including the absence of a helicopter parking lot, an inadequate bus station, insufficient space for equipment storage, and a lack of facilities such as an aircraft repair center and ship storage.

Ongoing Investigations

The Commission for the Investigation of Abuse of Authority (CIAA) has initiated a probe into these allegations. On March 25, 2024, the CIAA requested the Director General of the Civil Aviation Authority of Nepal (CAAN) to provide detailed documentation on 17 critical points concerning the airport’s construction. Sources indicate that the Director General personally attended and provided statements, and numerous documents from CAAN have been seized for investigation.

Conclusion

The findings of the Auditor General’s report paint a concerning picture of the Pokhara International Airport project. With significant cost overruns, delays, and allegations of corruption, the project raises questions about the efficacy of Chinese-funded infrastructure projects in Nepal.