China-Built Airport in Nepal Was Littered With Corruption, Inquiry Finds

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1. SS: In a 36-page report released Thursday, a parliamentary committee’s investigation into the airport in Pokhara found that China CAMC Engineering, the construction arm of a state-owned conglomerate, Sinomach, had failed to pay taxes, had not finished the project to specification and had used poor-quality construction, all because of corruption and a lack of oversight.The airport was built with a 20-year loan from the Export-Import Bank of China, a state-owned lender that finances Beijing’s overseas development work. Nepal must soon start repaying the loan using the profits generated by the airport, which opened in 2023. The airport has fallen well short of its projections for international passengers. There is only one weekly international route landing in Pokhara.

   China celebrated the airport’s construction as a “flagship project” of its Belt and Road Initiative, President Xi Jinping’s signature infrastructure campaign, which has doled out an estimated $1 trillion in loans and grants to other countries.But Nepal has quietly rejected that designation, because it has complicated diplomatic ties with India, its neighbor and rival to China for influence in the region. India, a major destination for Nepali travelers, has not approved any international routes to Pokhara. In some of those cases, Nepal’s civil aviation authority was forced to pay for items that CAMC failed to deliver as promised. The report also stated that Nepali authorities had waived $16 million in taxes for CAMC, even though the contract stated that the company was obligated to pay customs duties and value-added tax on equipment imported from China.

2. This seems like less a case of China debt-trapping a nation and more so a case study of why these state-sponsored projects often over promise and under perform.

   China may or may not be trying to take advantage of poorer nations through the Belt and Road Initiative, but I think they are going to find out the hard way why both private capital and Western governments are reluctant to get involved in projects like this.

3. >The $216 million airport receives only one international flight a week.

   “Nepali officials say Delhi has refused to allow big passenger planes to fly west through its airspace – meaning planes cannot fly over India to reach the Gautam Buddha airport. Access to Indian airspace would mean shorter flights at lower cost.”

   https://www.bbc.com/news/world-asia-66425253

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