A parliamentary subcommittee has concluded that billions of rupees were misused during the construction of Pokhara International Airport, highlighting large-scale financial irregularities. Formed under the Public Accounts Committee and coordinated by lawmaker Rajendra Lingden, the subcommittee found that various unnecessary payments were made to contractors under multiple headings, raising serious concerns about the project's financial transparency.

The investigation concluded that the then interim government led by Khila Raj Regmi increased the airport’s cost to over Rs 20 billion by misusing policy-level decisions. To justify the inflated costs, the government had formed an expert team headed by former Supreme Court Registrar Dr. Ramkrishna Timilsina. The team recommended raising the cost, citing the adoption of the Engineering, Procurement and Construction (EPC) model, which generally entails higher expenses due to a single contractor managing the design, procurement, and construction. Based on this recommendation, the Regmi-led Cabinet approved the construction contract on September 14, 2013, within the Civil Aviation Authority of Nepal’s (CAAN) approved budget ceiling.

However, the subcommittee found extensive irregularities in more than a dozen expenditure categories. These included an unjustified tax exemption of Rs 2.22 billion granted to the contractor and an additional Rs 322 million spent by CAAN to level the Chhinedanda airport area—work that should have been covered under the original contract. Furthermore, irregular expenses were reported in the form of payments for equipment and services that either exceeded contract limits or were not part of the original plan. These include $742,000 for air conditioning installation, $16.4 million for drainage works, $4.4 million for digging soil, and $5.5 million for importing soil. The report also highlights payments of $22.2 million for soil filling, $200,000 for fuel tanks, and $2.8 million in consulting fees.

The project was financed by a high-interest loan from the Export-Import Bank of China. Of the total 1.37 billion yuan loan agreed upon in March–April 2016, only 355.9 million yuan was interest-free. This translates to Rs 22.61 billion in Nepali currency, of which Rs 5.83 billion is non-interest bearing. The remainder must be repaid by 2035, requiring annual installments of Rs 840 million. However, the airport has failed to generate income, and loan repayments have not begun. Attempts made during high-level visits to China to convert the loan into a grant were unsuccessful. The airport was constructed by China CAMC Engineering Co. Ltd (CMC).

The subcommittee also reported that an additional $750,000—roughly Rs 2 billion—was illegally paid for AC installation, which should have been included within the original Rs 22 billion budget. It further found that the airport’s runway was built 20 feet deeper than specified in the Detailed Project Report (DPR), creating safety issues for large aircraft. In contrast, the Chhinedanda hill on the eastern side was only leveled by 30 meters instead of the planned 40 meters. The Auditor General’s 59th annual report had already flagged that the stones and soil for the runway, which were supposed to be sourced from five kilometers away, were instead taken from nearby. Nevertheless, Rs 1.82 billion was paid for this unverified work.

A complaint regarding irregularities in the airport project was filed in 2014 with the Commission for the Investigation of Abuse of Authority (CIAA), but the then-chief commissioner Lokman Singh Karki put the probe on hold on March 26, 2014. Although the CIAA resumed a field investigation in October–November 2023 following a renewed complaint, the process was again halted due to political interference.

The subcommittee has recommended taking action against key individuals involved in the decision-making process. These include former Chairman of the Council of Ministers Khila Raj Regmi, Finance Ministers Shankar Prasad Koirala and Ram Kumar Shrestha, and expert committee coordinator Dr. Ramkrishna Timilsina. It has also called for the immediate suspension and investigation of CAAN Director General Pradeep Adhikari, citing grounds for money laundering. Subcommittee member Prem Kumar Ale said the corruption in the airport’s construction, amounting to over Rs 14 billion, is among the largest ever. He also called for action against former CAAN Director Generals Sanjeev Gautam and Rajan Pokharel.

Other individuals recommended for investigation include Pokhara Airport Project Chief Binesh Munankarmi, National Pride Project Director Chandmala Shrestha, Engineer Prabin Neupane, Administration Chief Rajendra Prasad Poudel, and CAAN Director Baburam Poudel. Although Finance Minister Gyanendra Bahadur Karki was also allegedly involved, the subcommittee could not establish accountability due to the Finance Ministry’s reluctance to provide the necessary documentation.

The subcommittee comprises lawmakers Lekhnath Dahal, Arjun Narsingh KC, Gokul Prasad Baskota, Janardan Sharma, Prem Bahadur Ale, Tara Lama, Deepak Giri, Dev Prasad Timilsina, Ram Krishna Yadav, and Rukmani Rana. According to Secretary Ek Narayan Giri, the report has not yet been submitted to the full Public Accounts Committee but will be forwarded soon for necessary action.