The anti-graft body in Nepal has arrested a number of people and exposed a deep collusion between Chinese companies, former ministers and high-ranking government officials. It is not as though the corruption was unknown; it merely awaited the moment when such an expose would command the attention it has now received. What matters at this point is some straight talking—particularly about Chinese investments in Nepal and whether the Himalayan nation has genuinely benefitted from them, or at all.
The Pokhara airport project is just one of several ventures China pursued with previous governments in Nepal under its expansive Belt and Road Initiative (BRI). The recent expose, which has dominated national and international headlines, goes beyond the $250 million scam. It offers invaluable insights into how Beijing had a direct hand in the unfolding mess.
The airport was financed through a 20-year loan from the Export-Import Bank of China, a state-owned lender that funds Beijing’s overseas development, while China CAMC Engineering—the construction arm of the state-owned Sinomach—has been accused of inflating costs and manipulating contracts. Together, these allegations highlight how Chinese-funded projects tend to evolve, and how they eventually reveal themselves.
The 33-page chargesheet issued by the Commission for Investigation of Abuse of Authority (CIAA) on Sunday states categorically that Nepal’s ministers and government officials colluded with executives of China CAMC Engineering to pad construction costs by $75 million.
This pattern is not unique to Nepal. Across the world, many Chinese BRI projects have landed in controversy. The China-Pakistan Economic Corridor (CPEC), a $60 billion infrastructure programme, has been criticised for opaque dealings, corruption probes, and contributing to Pakistan’s mounting debt, all while being threatened by local separatist violence.
Sri Lanka’s story is even starker: burdened by unsustainable loans, it was compelled to lease the Hambantota Port and 15,000 acres of surrounding land to a Chinese state-owned enterprise for 99 years as a debt-to-equity swap—raising long-term concerns about sovereignty and China’s so-called “debt traps.”
Sri Lanka’s ambitious plans for a port, airport, stadium, conference centre, and road network were financed largely through Chinese loans, only for the country to later slip into a debt crisis of its own making. In Bangladesh, the Padma Bridge Railway Project and other ventures have suffered huge cost overruns and repeated delays due to problems linked to Chinese contractors.
Malaysia’s East Coast Rail Link met similar scrutiny after investigations revealed that former Prime Minister Najib Razak sought help from BRI-linked firms in a financial cover-up through inflated project costs. The contract was subsequently suspended and renegotiated at a lower price by the next government.
These cases reflect a broader pattern. A 2021 study by the US-based AidData institute found that 35 per cent of BRI projects—surveying more than 13,000 ventures across 165 countries—had encountered corruption scandals, labour violations, or environmental breaches, compared to 21 per cent among non-BRI Chinese projects.
Against this backdrop, attempts by some Nepali intellectuals and scholars to treat the Pokhara airport scandal solely as a “corruption and governance-related matter” appear inadequate. Chinese investments, especially those tied to the BRI, come with a fixed agenda. The geopolitical interests Beijing pursues—particularly its effort to cultivate a network of friendly states such as Pakistan, Nepal, and Bangladesh to encircle India and dilute New Delhi’s regional influence—cannot be conveniently separated from such scandals.
China’s investments in Nepal, Pakistan, and Bangladesh serve multiple strategic goals: expanding its trade corridors through the BRI (e.g., Gwadar and Chittagong ports), gaining geopolitical leverage to isolate India, securing access to resources, extending military and intelligence influence, and exporting its own model of debt-fuelled infrastructure development. This creates long-term dependencies and reshapes regional power balances.
Sri Lanka’s experience illustrates another dimension of this strategy: China has routinely used the Hambantota Port to dock vessels like the Yuan Wang series—advanced satellite and missile tracking ships—raising major security concerns in India. These dual-use platforms fall under China’s Strategic Support Force and, despite being labelled as research vessels, can gather significant military intelligence.
Where China has failed most dramatically in its ambitions is in prioritising quantity over quality and expediency over transparency—an approach now felt across the network of countries involved in the BRI. The Pokhara airport corruption case is a textbook example of how China-Nepal relations under several government regimes have been misused, while Nepal paid the price. Former Nepali diplomat Vijay Kant Karna has been quoted by the media as saying that the deal lacked transparency and violated basic procurement norms, with political leaders acting merely as “instruments of diplomacy.”
This, indeed, is the core issue. When political leaders allow themselves to become instruments in a larger geopolitical exercise, it creates a space where corruption and strategic manipulation go hand in hand. As the saying goes, there are no free lunches—and for China, much lies at stake.
A senior official in India’s Ministry of External Affairs (MEA), speaking anonymously, believes that one of China’s key objectives in Nepal is to establish infrastructure with dual economic and military-intelligence utility, while also securing Nepal’s unwavering support for the “One China” policy. The Pokhara scam, therefore, should not shock anyone. Accountability must extend not only to the domestic actors involved but also to Chinese firms and institutions.
The broader story lies in examining the nature of collusion between the 55 people against whom the CIAA has filed criminal charges. These are not ordinary individuals—they include five former tourism and finance ministers, 10 former government secretaries, and several other senior officials. On the Chinese side, Wang Bo, chairman of China CAMC Engineering, and regional general manager Liu Shengcheng have been named as central figures.
Almost every major political party in Nepal—Nepali Congress, the UML, and the Maoist Centre—has been implicated or sees its representatives named in the chargesheet. The UML, particularly under the leadership of K.P. Oli, faces heightened scrutiny due to its overtly pro-China stance and past efforts to curry favour with Beijing.
It was during Oli’s government that Nepal sought to persuade China to convert the airport loan into a grant in exchange for political concessions that suited Beijing’s geopolitical agenda. China has cultivated relationships with leaders like Oli in Nepal, or their counterparts in Pakistan and Bangladesh, to entrench its influence in the region.
Scholars specialising in Chinese affairs argue that such inflated projects and financial irregularities are not accidental—they may be part of a calculated strategy to push countries toward financial distress, as seen in Sri Lanka.
There is a consistent pattern in the way Chinese companies operate under the BRI. As Forbes reported, nearly seven years into the initiative, Chinese investments in some countries have become synonymous with wasteful spending, environmental damage, and unsustainable debt. Around the world, numerous Chinese-financed projects lie half-finished while the promised economic opportunities remain elusive.
Nepal is now experiencing a similar reality. The Pokhara International Airport—touted as a “flagship project” of the BRI—has instead earned the reputation of being a “white elephant.” Its cost ballooned from an estimated US$170 million to US$244 million, a figure noted in the anti-graft chargesheet. Operationally too, the airport has failed to justify its expense. Since its opening in 2023, it has hosted only a single weekly flight to Lhasa and a few seasonal charters from China and Bhutan. According to a New York Times report, there are currently no scheduled international flights in or out of the facility, meaning it generates negligible revenue to service the mounting debt. For Nepal, this risks becoming yet another financial millstone.
Professor Adwitya Thapa of North Bengal University, an expert on regional geopolitics and Himalayan studies, observes that China will continue using such projects to expand its influence. While the Pokhara scandal must be investigated domestically—given the role of Nepal’s own actors—he stresses that accountability must also extend to Chinese state-owned enterprises. Beijing cannot pretend ignorance, especially considering that transparency in its Nepali projects was explicitly discussed during Xi Jinping’s 2019 visit.
Crucially, many Chinese projects in Nepal remain only on paper, never moving beyond the planning stage. This raises uncomfortable questions about China’s real intentions. While Chinese FDI in Nepal still trails behind India’s, what matters more is the BRI’s global reputation and the trail of financial and governance chaos it often leaves behind.
As Forbes quoted Jonathan Hillman of the Center for Strategic and International Studies: “As Chinese companies push deeper into emerging markets, inadequate enforcement and poor business practices are turning the BRI into a global trail of trouble.” The World Bank and several other multilateral institutions have debarred numerous Chinese companies for offences ranging from fraud and bribery to systematic cost inflation.
Ultimately, the BRI has not covered itself in glory. Many of its partner countries suffer from poor debt ratings and high corruption levels. Nepal is no exception—it ranks 107th out of 180 countries in Transparency International’s 2024 Corruption Perception Index. The Pokhara scandal underscores that the costs of doing business with Beijing are far greater than the loans themselves. It is now up to Nepal to decide how deeply it wishes to continue engaging with a model that has left trouble in its wake across continents.
