CAAN DG Adhikari frequenting CIAA over PRIA contract irregularities

KATHMANDU, April 4: The Commission for the Investigation of Abuse of Authority (CIAA) has taken a statement from Civil Aviation Authority of Nepal (CAAN)’s Director General Pradeep Adhikari on the allegation of irregularities in the contract of Pokhara Regional International Airport (PRIA). The commission started taking statements five months after it seized all the documents of the project, claiming that there were financial irregularities in the construction of the airport.

"Adhikari has been called for a statement as the contract for the construction of PRIA is being investigated," said a high-ranking CIAA source. The commission took control of the documents of PRIA on October 29.

"Documents have already been seized for necessary investigation on issues such as doubling the cost of airport construction, and manipulating the contract process for construction. On this basis, they have been called so that we can learn the reason and method of awarding the contract at a higher cost," said the CIAA source.

A complaint was filed in the commission alleging the director general of helping in the cost increment of PRIA. The complaint also mentions that the airport construction work was of poor quality, and the DG colluded with the construction company for the construction of the project. In order to investigate the complaint, the commission raided the PRIA construction project on October 29, right after Dashain. “Along with the Pokhara Airport, the CIAA has also received complaints about the Tribhuvan International Airport (TIA) and Bhairahawa Airport. At present, we have taken statements related to only Pokhara airport,” said the source.

Currently, TIA is undergoing expansion with three projects valued at around Rs 15 billion. The projects include expanding the hangar hub on the east side, constructing taxiways on the east and west sides, and extending the apron on the north side. However, there have been complaints about inflated cost estimates for these projects, which the authority is yet to investigate. “Priority is now being given to the project in Pokhara,” said the source.

The Director General has been saying that he has a good relationship at the highest level of the government and that the commission cannot do anything about him. Despite having disagreements with the then Minister for Tourism, Sudan Kirati for trying to remove him from the position of Director General of CAAN, he managed to maintain his position.

Even now, when he is giving his statement to the commission, he insists that all arrangements have been made beforehand. The cost of PRIA, which was initially estimated to be completed at Rs 12 billion, was later increased.

At that time, the airport project chief was Pradeep Adhikari, who is currently the Director General of CAAN. Sources said that Adhikari increased the cost from Rs 12 billion. Although three international and eight domestic flights can be parked in the airport built with the help of a loan from China's Exim Bank, there has been no international flight except for a few.

A complaint has been lodged with the CIAA alleging that the cost estimate for the construction of PRIA has been artificially inflated. The airport was built with Rs 22 billion received from the Exim Bank, along with a two billion rupee subsidy.

The former Chief Project Officer awarded the contract for the construction of PRIA to the Chinese company, China CAMC Engineering Company Limited. Sources allege that he also arranged a deal to involve the Nepali contractor, Kshamadevi Group, in a joint venture with CAMC Engineering Company.

An agreement was reached between the government and CAAN on 5 June, 2016 after receiving a concessional loan of Rs 22 billion from China at an interest rate of two percent.

It is mentioned that the loan received by the government will be paid by CAAN at the rate of 2 percent for seven years after the construction is completed. It is mentioned in the agreement that the principal will be paid in 26 installments in 13 years, after the initial seven-year period.

The construction of PRIA was completed last December, and Prime Minister Pushpa Kamal Dahal inaugurated the airport. During the inauguration ceremony, the Chinese ambassador remarked that the airport's construction was a project under the Belt and Road Initiative (BRI). Subsequently, in September, Drukair-Royal Bhutan Airlines made its maiden commercial flight to PRIA from Bhutan.