The Authority has filed a corruption case against 55 people, including 5 former ministers and 10 former secretaries, in the case of irregularities in the construction of the airport. The authority filed the corruption case in the special court on Sunday, fixing the amount of about 8 billion rupees.
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The Commission for the Investigation of Abuse of Authority has finally filed a case in a special court, naming former and current high-ranking officials of the political, administrative, commercial, and civil aviation authorities as defendants in the case of irregularities in the construction of the Pokhara Regional International Airport, built with Chinese loan assistance.
The CIAA has filed a corruption case against 55 people, including 5 former ministers and 10 former secretaries, in the airport construction irregularities case. The authority filed a corruption case in a special court on Sunday, fixing a fine of about 8 billion rupees.
The CIAA has filed a case against former ministers Post Bahadur Bogati (late), Ram Sharan Mahat, Deepak Amatya, Ram Kumar Shrestha and Bhim Acharya as defendants. Among the defendants, Congress leader Mahat is the then Finance Minister, while the remaining 4 are former Tourism Ministers.
According to the CIAA, suspended Director General of the Civil Aviation Authority of Nepal Pradeep Adhikari and former Director Murari Bhandari have also been made defendants. Both are also defendants in the Nalinchok Heliport construction irregularities.
This is how the construction of Pokhara Airport progressed
In 2065 (2008), the concept of developing Pokhara as a regional international airport was formulated. Two years later, in 2010, Joshi Associates submitted a detailed engineering survey, layout, plan and soil estimate. After that, the authority prepared tender documents with a total cost estimate of 174.994 million US dollars including VAT, including 145 million US dollars for construction and 30 million US dollars for the purchase of an additional 550 ropanis of land.
However, without finalizing this, the issue of completing the project for 22 billion rupees was finalized in collusion. Similarly, the fact that the initial cost estimate was increased in collusion while completing the project, causing loss and damage to public property, has been confirmed by the parliamentary investigation report.
After the Chinese government expressed its intention to build Pokhara Airport on the EPC (Engineering, Procurement and Construction) model and hand it over to the Nepal government, on 11 Mangsir 2068, the Ministry of Finance approved the Civil Aviation Authority of Nepal to proceed with the construction work according to the Chinese proposal and model.
After the approval of the Nepal government, a concessional loan was provided through China's Exim Bank and a condition was imposed on the construction that only Chinese companies could compete. After that, other foreign companies were not allowed to compete in the construction of this project. On 19 Jestha 2067, a meeting chaired by the then Finance Minister decided to proceed with the project by having a Chinese company build it. After that, a Chinese contractor was selected.
On 24 Magh 2068, the Ministry of Finance made a ministerial decision to amend the existing EPC tender document for the construction of the airport and prepare a revised cost estimate of 170.53 million US dollars, including 3 percent contingency and 13 percent VAT. After that, it was decided to invite bids with a notice of 45 days, allowing only Chinese companies, Chinese partner companies, and Chinese-Nepali partner companies to participate. Two days later, on 26 Magh, the bids were invited.
On the same day (26 Magh), 10 Chinese companies purchased the tender documents. At the request of six other companies, the Authority's board of directors extended the deadline by another 30 days. Accordingly, the deadline for submitting tenders was set to 12 Baisakh 2069.
On 5 Baisakh 2069, the 'Counselor's Office for Economic and Commercial Affairs' of the Chinese Embassy in Nepal wrote a letter to the Ministry of Tourism to involve 4 contractor companies in the construction of the airport under the EPC model, on the recommendation of the 'China International Contractors Association'. Then on 22 Baisakh, Sino Hydro Company, China International Water and Electric Company and CAMC Engineering Company submitted the tender documents. Five days later, on 27 Baisakh, a discussion was held between representatives of Exim Bank and Authority officials, during which the Chinese team requested to select the tender quickly.
During the evaluation of the financial proposal on 26 Ashad 2069, there was confusion as the bid submitted by CAMC including provisional/VAT was lower than that of the other two companies but was significantly higher than the cost of the Authority. The Authority's evaluation committee had submitted an opinion on this matter that it was 'substantially higher'. However, none of the three Chinese companies participating in the bid were found to have fulfilled the technical experience—having worked on airport projects worth 120 million US dollars. The qualification document included the condition of having completed an airport project worth at least 120 million US dollars.
However, the Chinese Embassy in Nepal had sent a letter to the Authority on 10 July 2012 stating that the three companies that submitted the bid were 'qualified, experienced, capable of performing well and reliable for an international airport'. The parliamentary committee report reveals that the Nepal government was lied to by saying that they had qualifications that were not there. It seems that the Authority proceeded with the process accordingly on 31 Ashad 2069 after the letter from the Chinese Embassy.
Two weeks later, on 15 Shrawan 2069, a committee was formed under the leadership of the then Joint Secretary of the Ministry of Tourism on the report of the evaluation committee at a meeting of the Authority's Board of Directors. The committee was given a mandate to visit China and submit its opinion. After that, out of the three Chinese companies, China International had accepted $349.283 million, Sinohydro $337.561 million, and CAMC $305.123 million. The Authority, however, submitted an opinion stating that there was a problem in making a decision, saying that the airport cost estimate was more than $166.41 million.
Then, CAMC sent a letter to the Authority saying that 'negotiations' could be held. In the letter sent by CAMC to the Authority on 8 Bhadra 2069, it was mentioned that the cost could be verified by mutual agreement between both parties after the completion of 'detail engineering and project design'. The next day, the Authority's Board of Directors concluded that there was confusion, saying that it would be 'contrary to the Public Procurement Act'.
Three days later, the Ministry of Tourism decided to seek the opinion of the Procurement Monitoring Office, inform the Chinese government side through diplomatic channels about the cost overrun, and send a letter stating that the authority should consider and decide on the remaining issues. A complaint was also filed with the Commission for the Investigation of Abuse of Authority on this issue. The authority had instructed on 12 Bhadra 2069 to ‘not make illegal decisions’. However, ignoring the instructions, the bidding was moved forward on 9 February 2012.
The cabinet meeting on 4 Falgun 2069 decided to approve the size, quality, number and design of the airport within the authority’s cost estimate. Then, negotiations were held again with CAMC and a request was made to prepare a ‘feasibility study report’.
CAMC proposed $264 million, modifying the initial design by adding aerobridges, runways, taxiways, etc. Initially, the Authority had proposed a cost of 145.559 million, but CAMC proposed 305.123 million, and later China Airport Construction Corporation proposed 264 million.
Then the Authority formed a task force under the coordination of former Supreme Court Registrar Ramkrishna Timalsena, in which expert Purushottam Dangol and former director Binodananda Chaudhary were members. The Authority has made all three defendants in the case filed on Sunday.
The task force reported that ‘the cost estimate prepared by the Authority was not prepared as per the procurement provisions’. Then the Timalsena task force suggested that 215.965 million dollars would be appropriate. The Cabinet meeting on 4 Falgun 2069 agreed to finalize the contract within this limit.
Then, with the political change, an elected government led by the then Chief Justice Khilraj Regmi came to power. Former Secretary Ram Kumar Shrestha became the Minister of Tourism. The Authority decided on 29 Kartik 2070, fixing 215.965 million as per the report of the Timalsena Task Force. On 11 Poush 2070, the Authority Board declared the decision appropriate and cleared the way for the tender.
Shortly after that, the Congress-UML joint government came to power. Ram Sharan Mahat was the Finance Minister in this government. The Authority's charge sheet states that the Timalsena Task Force report was implemented maliciously. Bhim Acharya was the Tourism Minister in the same cabinet. The Authority has also made him a defendant in the case.
Meanwhile, the Authority led by Lokman Singh Karki had filed a complaint on 12 Chaitra 2070 regarding the excessive cost increase.
A bid drafting committee was formed on 12 Baisakh 2071. On 14 Baisakh, the draft for building an airport at a cost of more than 215 million was approved. On 8 Chaitra 2072, an agreement was reached between the Nepal-China governments to build at the latest cost. By 13 Falgun 2074, all agreements were completed and the construction was completed in 5 years. The airport was inaugurated on 17 Paush 2079. However, despite the inauguration, neither the airport was commercially operated, nor was the structure built with loans of quality. And as the investigation progressed, the parliamentary committee and the CIAA entered into the matter.
On 8 Jestha 2071, an agreement was signed with the Chinese company CAMC Engineering. Prime Minister Sushil Koirala, Finance Minister Ram Sharan Mahat, and Tourism Minister Bhim Prasad Acharya were present when the decision regarding the cost was made. On 23 Jestha 2072, the Chinese bank had signed an agreement to provide a loan of 22 billion at an interest rate of 2 percent for the airport project. But contrary to the agreement, the runway of the airport was reduced from 3,000 meters to 2,500 meters.
A parliamentary investigation had revealed irregularities of Rs 2.22 billion in a new agreement to provide tax exemptions contrary to the original agreement. The parliamentary committee's investigation revealed that Rs 4.435 billion was paid for runways, taxiways, aprons, dams and drains, Rs 320 million in irregular payments for cutting the Chhinedanda, Rs 742 million in AC purchases, and the work was carried out without an environmental impact assessment.
On Ashar 13, 2081, the Accounts Committee formed a subcommittee. Ten months later, on Baisakh 28, 2082, it submitted a report and directed the suspension of 8 people. The report identified irregularities including Rs 6.56 billion in cost increase, Rs 2.22 billion in tax exemption withdrawal, and Rs 320 million in additional payments. It is mentioned that the initial cost estimate for the construction was increased to Rs 216 million. The initial cost estimate was maintained at $ 145 million.
