Nepal Slaps Chinese Firm With Corruption Case Over Pokhara Airport: What Are The Charges Against China CAMC Engineering?

(MENAFN- Live Mint) Nepal's anti-corruption body, the Commission for Investigation of Abuse of Authority (CIAA), has filed a case against 55 defendants, including a Chinese construction company and several Nepali bureaucrats and former ministers, over the construction of the Pokhara International Airport.

As per a report by news agency ANI, the CIIA filed the case in a special court, naming Chinese firm China CAMC Engineering Co, the construction division of state-owned conglomerate Sinomach, and several others.

The Pokhara Regional International Airport, the CIIA said, had been approved by relevant authorities for construction at a cost of $145 million.

However, the CIIA alleged that China CAMC Engineering Co manipulated the cost estimates to gain "illegal benefits".

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The CIIA alleged that China CAMC Engineering Co had played an active role in increasing the cost estimate for the airport to almost double its initial cost, from $145 million to a whopping $286.5 million.

"It is seen that the contractor, China CAMC Engineering Co Ltd, acted with bad intentions, increased the cost estimate unnaturally without reasonable cause, and forced the other involved defendants to compete in accordance with the aforementioned laws to gain illegal benefits," the information officer of the CIIA said in a release following the filing of the case on Sunday.

"Before entering into further work related to the procurement process, it was seen that it had written to civil servants of public institutions with bad intentions to increase the cost estimate by setting an unnatural price and increasing the cost estimate to 286.526 million US dollars," the CIIA explained.

China CAMC Engineering Co was central to the Pokhara airport project, and imported building materials and machinery from China during its construction.

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Earlier, an investigation made by a sub-panel of the Nepal House of Representatives' Public Accounts Committee (PAC) had also confirmed irregularities and corruption in the construction of the airport.

The sub-panel's report had said that the soil used at the construction site was not suitable, and despite $5.5 million being paid to transport suitable soil and pebbles from a nearby site, no such activity was undertaken.

The Chinese contractor was also paid $4.435 million to press soil to level the runway, taxiway and drainage systems, but no work was done in this regard.

The runaway elevation too was below the required level, the report said, explaining that the filling to sand and pebbles required to attain said level was not carried out.

China CAMC Engineering Co was also responsible for installing air conditioner (AC) units at the airport, but the report found that the Civil Aviation Authority of Nepal (CAAN) had to pay an extra $742,659 for the installation of the heating, ventilation, and air conditioning (HVAC) system.

The sub-panel had also found that a payment of $10.648 million was paid to China CAMC Engineering Co for the construction of drainage along the runway, taxiway, and apron, but no work was done to this end.

China CAMC Engineering Co was also given a tax exemption of Nepali ₹2.2 billion despite the contract agreement clearly stating that the firm would pay the taxes.

The sub-panel's report concluded that CAAN, which oversaw the construction, was directly involved in corruption, and recommended the immediate suspension of its director general.

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While the airport opened for operations a couple of years back, it has been plagued by multiple issues, including design and navigational flaws that were identified by a government-constituted high-level study committee.

"It has been understood that the airport requires a five per cent climb gradient for the Missed Approach Procedure Design Gradient, which is considered high for aircraft from a technical standpoint,” a report from the High-Level Study and Recommendation Committee formed for the Reforms in the Civil Aviation Sector said in November this year.

“As a result, medium-haul category jet aircraft are subject to a load penalty of four to six tonnes upon arrival, and during departure, weight restrictions also apply due to the available field length, thereby affecting the passenger and cargo-carrying capacity of the airlines," the report added.

The report further highlighted that the current runway length of 2,500 metres has imposed limitations for airline operations, particularly under specific conditions, such as heavy aircraft weight, high temperatures and/or low pressure weather conditions.

Reports also indicate that while domestic operations are fully functional, international carriers thus far have stayed away from operating out of the Pokhara airport: the only scheduled international service is the weekly Pokhara-Lhasa flight operated by Himalaya Airlines, which is a Nepal-China joint venture.

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