A parliamentary subcommittee has concluded that irregularities occurred at every stage during the construction of Pokhara International Airport. The report, prepared by a subcommittee formed under the Public Accounts Committee (PAC) of the House of Representatives, follows on-site inspections and monitoring of the project. It found that payments were made without any actual work being completed, additional works were added without justification, and expenses exceeded the contractual amounts.
The report, submitted by subcommittee coordinator Rajendra Lingden to PAC chairman Hrishikesh Pokharel, stated that billions of rupees were disbursed in violation of legal provisions. It recommends a comprehensive investigation into the airport's legal and technical aspects and calls for action against those involved in corruption and irregularities.
According to the report, payments were made for activities that were either not carried out or not properly documented. For instance, USD 1.65 million was paid for soil excavation related to runways, taxiways, aprons, and drainage systems, though the work was not done. Likewise, USD 4.43 million was paid for filling the structures, despite no work being carried out. Another USD 5.5 million was disbursed for bringing gravel and soil from outside the site, but the materials were actually sourced locally, with no evidence to support the external procurement.
The original agreement had allocated USD 15.23 million for additional items. However, this figure ballooned to USD 24.36 million in the final bill. The report estimates that USD 22.25 million was irregularly spent on soil-related work alone. It also found discrepancies in how soil mixed with gravel—generated during a reduction in runway height—was handled. Instead of procuring new subbase material, the project reused on-site material, benefiting the contractor at the project's expense. This design change, which saved the contractor an estimated USD 8.06 million, was approved without proper documentation.
The subcommittee raised concerns that such changes, which reduced the project's cost burden on the contractor while increasing the overall budget, were approved without proper scrutiny and violated public procurement norms. It referred to the 60th annual report of the Auditor General to support its findings, noting that the subbase material used in the runway was supposed to be purchased from external sources.
In another irregularity, the Nepal Electricity Authority (NEA) paid USD 742,659 from its own budget for the airport’s Heating, Ventilation and Air Conditioning (HVAC) system, even though the cost was to be covered under the project’s feasibility study. The NEA also issued a handover certificate before construction was complete. Meanwhile, a USD 220,000 fuel storage facility remains unfinished.
Irregularities extended to the policy level as well. The subcommittee found that a three-member task force had been formed to justify inflated project costs, violating the Public Procurement Act. The Civil Aviation Authority, along with the ministries of Tourism and Finance, repeatedly signed new implementation agreements granting NPR 2.224 billion in tax exemptions—without legal justification or transparency.
The Ministry of Finance did not respond to written requests from the committee seeking the basis for these tax exemptions. Coordinator Lingden noted that the agreed works were never completed, and serious irregularities, including planned tax exemptions, occurred.
When questioned about why the subcommittee only recommended action against implementation-level employees, Lingden responded that their primary focus was on those who signed on the project decisions, but further investigation into others would follow.
In response to the findings, Minister for Culture, Tourism and Civil Aviation, Badri Prasad Pandey, told Parliament during discussions on the Nepal Civil Aviation Authority Bill that corruption in aviation projects, including airport construction and aircraft procurement, would be thoroughly investigated and acted upon.
The report states that Pradeep Adhikari served as the project chief throughout the airport’s construction period. PAC chairman Pokharel said the full report would be discussed in the next committee meeting, and the committee's decisions would be binding.
The subcommittee recommends action against all officials involved in planning, policy-making, procurement, and implementation. It specifically calls for the suspension and investigation of Civil Aviation Authority of Nepal’s Director General Pradeep Adhikari (Project Chief from 2014 to 2017 and DG since 2021), Project Chief Binesh Munankarmi (2017–present), National Pride Project Director Chandmala Shrestha, Project Engineer Prabin Neupane, Project Administration Chief Rajendra Prasad Poudel, NEA Director Engineer Baburam Poudel, and former NEA Directors General Sanjeev Gautam and Rajan Pokharel.
The report also noted that a complaint regarding cost overruns in the airport’s construction had been filed with the authorities on March 25, 2017, and duly registered. The Ministry of Finance had approved the airport’s international construction on November 27, 2011.
The airport was built under an Engineering, Procurement, and Construction (EPC) model, with funding from China Exim Bank through a concessional loan. The NPR 22 billion contract was awarded to China CAMC Engineering on November 27, 2011. The agreement stipulated that loan repayment would begin after seven years, spread over 13 years in 26 installments.
Despite the substantial investment, only Himalaya Airlines operates regular international flights from Pokhara International Airport, inaugurated two years ago. International carriers remain hesitant to begin services, raising concerns that the airport could become a “white elephant.”
The subcommittee was formed in 2024 to investigate the matter and includes members Janardan Sharma, Gokul Prasad Baskota, Amanlal Modi, Arjun Narsingh KC, Prem Bahadur Ale, Ramkrishna Yadav, Tara Lama, Dev Prasad Timilsena, and Deepak Giri. Eight lawmakers, including coordinator Lingden, endorsed the report in full, although some, such as Baskota, expressed differing views.
