CIAA Files Corruption Case Over Pokhara International Airport, Former Finance Minister Among 14 Accused

Nepal’s anti-corruption watchdog has filed a major corruption case against former senior government officials, including former Finance Minister Gyanendra Bahadur Karki, over alleged financial irregularities during the construction of the Pokhara Regional International Airport. The Commission for the Investigation of Abuse of Authority (CIAA) has demanded recovery of more than Rs 3.62 billion, accusing officials of illegally granting tax exemptions to the Chinese contractor involved in the airport project.

The case has been filed at the Special Court against 14 individuals, including high-ranking former bureaucrats and officials of the Civil Aviation Authority of Nepal. According to the CIAA, the accused approved arrangements that contradicted the original procurement agreement signed for the airport’s construction, ultimately causing substantial financial loss to the state.

Investigators claim that the main controversy revolves around an implementation agreement signed with China CAMC Engineering Co. Ltd., the contractor responsible for constructing the airport. Under the original procurement contract between the Civil Aviation Authority of Nepal and the contractor, all taxes, customs duties, and government fees were supposed to be included within the contractor’s quoted project price. The contractor itself was required to pay those obligations according to Nepal’s prevailing laws.

However, the CIAA alleges that government officials intentionally altered this arrangement through a separate implementation agreement that granted tax and customs exemptions to the contractor. According to the investigation, this effectively allowed the company to receive payment that already included tax components while simultaneously avoiding payment of those taxes to the state treasury.

The anti-corruption body argues that the arrangement created a situation of “double benefit” for the contractor. On one hand, the company received compensation under a contract value that already incorporated tax liabilities. On the other hand, it was later exempted from paying those same taxes and duties. The CIAA says this directly harmed the Nepal government and resulted in a financial loss of Rs 3.62 billion.

Officials accused in the case include former Finance Minister Gyanendra Bahadur Karki, former Finance Secretary Shankar Prasad Adhikari, former Tourism Secretary Maheshwor Neupane, former joint secretaries Suresh Acharya and Dunduraj Ghimire, former joint secretary Kewal Bhandari, former Director General of the Civil Aviation Authority Sanjiv Gautam, former Director General Pradeep Adhikari, along with several other officials and technical personnel involved in the project approval and implementation process.

The Pokhara International Airport project has remained politically and financially controversial since its construction phase. Built with Chinese loan assistance under the Belt and Road Initiative framework, the airport was initially presented as a strategic infrastructure project intended to strengthen tourism, regional connectivity, and international air access to western Nepal. However, questions over cost structures, loan terms, operational sustainability, and procurement transparency have repeatedly surfaced over the years.

The latest corruption case is likely to intensify scrutiny over how large infrastructure projects are negotiated and executed in Nepal. Analysts say the case exposes deeper structural weaknesses in public procurement oversight, especially in projects funded through foreign loans and bilateral agreements. Large infrastructure contracts in Nepal have often faced criticism for weak accountability mechanisms, opaque negotiations, and political influence during implementation.

Legal experts say the case may also test Nepal’s institutional willingness to hold senior political and bureaucratic figures accountable in high-profile corruption investigations. While the CIAA has previously filed cases involving public officials, corruption allegations connected to large-scale national infrastructure projects rarely reach this level of political sensitivity.

Economists argue that such controversies could have broader implications for Nepal’s investment environment. International infrastructure financing often depends heavily on transparency, legal certainty, and institutional trust. Repeated allegations of irregularities in mega-projects may raise concerns among development partners and investors regarding governance standards and financial accountability.

At the same time, governance advocates believe the investigation could become an important precedent if pursued independently and transparently. They argue that ensuring accountability in public infrastructure spending is critical at a time when Nepal is increasingly dependent on external borrowing for large development projects.

The CIAA’s allegations have now shifted the focus from the airport’s physical construction toward the financial decisions made behind the scenes. As the case moves through the Special Court, it is expected to trigger wider political debate over procurement practices, ministerial responsibility, and the management of state-funded infrastructure projects in Nepal.