Chinese Firms in Nepal: Delays, Corruption, and Controversies!

The Planning, Monitoring and Evaluation Division of Koshi Province has recommended blacklisting the Chinese company Chongqing International Construction Corporation (CICO) and its Nepali partner Kanchharam Construction (KC) for delays and substandard work in road construction projects.

CICO and KC were contracted to build the Korsane-Kerabari-Sinhadev (KKS) and Lakshmimarg-Dengihat-Babiabirta-Amahi (LDBA) road sections in Morang district under the Asian Development Bank-funded rural road network improvement project. The contract, worth 70 crores, was to be completed in two years. However, five years later, only 54 percent of the work has been finished, according to Shaligram Devkota, a senior engineer with the division.

“The road construction work is also not satisfactory and has been substandard and contrary to the agreement,” said Devkota.

This recommendation follows previous issues with Chinese companies in Nepal, such as the China State Construction Engineering Corporation Limited, which faced complaints in December 2023 for delays and substandard work on the Siddhababa Tunnel project in Butwal. Chinese firms in Nepal, particularly in road construction, have often been criticized for project delays and cost overruns.

Engaged in Criminal Activity

Chinese citizens in Nepal are involved in various criminal activities, including gold smuggling and cybercrime. Some officials from a construction company are reportedly involved in gold smuggling and illegal liquor trade. Additionally, sources claim that some of these officials are connected to Chinese intelligence agencies.

Despite these allegations, no action has been taken against them due to the intervention of the Chinese embassy, sources say. It is also alleged that the Chinese construction company secures project contracts by financially enticing employees and political leaders. “If the Belt and Road Initiative (BRI) is implemented in Nepal, such activities by Chinese companies are likely to increase,” a source warned.

China’s Delays Cause Headaches for Nepal

Delays by Chinese construction companies in several major projects, including the Narayangadh-Butwal road, Muglin-Pokhara road, and the Kathmandu-Tarai Madhes Expressway, are causing significant hardships for common people and financial losses for the Nepali government.

Engineer Shiva Khanal, information officer of the Narayangadh-Butwal road project, eastern section, reported that 33 km of the eastern section has been blacktopped as of 15 Baisakh. “In the last five months, we have completed 18 kilometers of one-way road paving,” he said. China State Construction Engineering is responsible for this project.

The Pokhara-Muglin road section is also facing delays. China Communication Construction is handling the eastern section, while Anhui Kaiyuan Road & Bridge Company manages the western section. The slow pace of work is affecting the public, businesses, and government finances.

Similarly, the Siddhababa tunnel in Butwal-Palpa, being built by China State Construction Engineering Corp Limited, has faced delays since the beginning.

The expansion of the Kathmandu Ring Road has been stalled for a year and a half. Vijay Jaisi, head of the Development Assistance Coordination Division under the Roads Department, stated that there has been no recent contact from the Chinese side. The project aims to expand the four-lane road to eight lanes, with an estimated cost of Rs 6 billion for the Kalanki-Maharajganj section.

Local protests have halted the construction of the Damak Industrial Area in Jhapa. Although Chinese investment was initially confirmed, the project has been stalled due to land ownership disputes, compensation issues, and opposition from local residents.

Suspicion of Corruption in Airport Construction

Two parliamentary investigation committees have been formed to scrutinize suspected irregularities in the construction of Bhairahawa-based Gautam Buddha International Airport and Pokhara International Airport, both built by Chinese companies.

Pokhara International Airport, financed by high-interest Chinese loans, is burdened by debt and stringent Chinese laws. In 2072 BS, the government borrowed 1 billion 378 million Chinese Yuan to build Pokhara Airport. However, two years post-inauguration, the airport remains unprofitable due to a lack of international flights.

“The study will focus on why the two international airports were built, why they could not be operated, and how they can be moved forward,” said Rishikesh Pokharel, Chairman of the Audit Committee. “There will be an investigation to determine if there were any irregularities.”

Gautam Buddha International Airport in Bhairahawa and Pokhara International Airport are both at a standstill, with suspected irregularities during their construction. The Public Accounts Committee of the House of Representatives has established two sub-committees to investigate potential government harm caused by extending the construction periods unnaturally.

The Pokhara Airport project, initiated in the financial year 2074/75, was scheduled for completion in 2077/78. However, project costs increased from 22 billion to 25 billion 34 billion due to a two-year delay. Similarly, the construction of Bhairahawa Airport, which started on Magh 1, 2071, was slated for completion by Poush 2075 but was delayed by five years. Consequently, the initial construction cost of 30.91 billion rose to 35.66 billion. The Auditor General’s office has also questioned the absence of international flights at these airports.


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