Challenges of China’s Infrastructure Projects: The Case of Nepal’s Pokhara International Airport

The Challenges of China’s Infrastructure Projects: A Case Study of Nepal’s Pokhara International Airport

When Nepal inaugurated its new international airport last year in one of its largest cities, it represented a significant milestone intended to boost the economy of one of Asia’s least developed nations, while simultaneously strengthening its relationship with China, which financed and constructed the project. However, the Pokhara airport has now become emblematic of the challenges associated with China’s global infrastructure endeavors, often criticized for their high costs and subpar construction quality, which frequently leave borrowing nations grappling with substantial debt.

On Thursday, the newly formed government of Nepal, led by the country’s predominant communist party known for its strong connections to Beijing, formally requested that China convert a $216 million loan for the airport into a grant, effectively nullifying the debt. This request was made during a visit from a Chinese delegation, which included Sun Weidong, China’s vice foreign minister.

The Pokhara airport has encountered numerous issues since its launch. Just weeks after opening in January 2023, a domestic flight bound for the city tragically crashed into a river gorge, resulting in the loss of 72 lives. Furthermore, the airport has struggled to attract regular international flights, casting a shadow over the financial viability of the project. In the past year, Nepal’s anti-corruption agency, along with a parliamentary committee, has initiated investigations into the circumstances surrounding the airport’s construction.

Last year, The New York Times reported allegations that China CAMC Engineering, a subsidiary of the state-owned conglomerate Sinomach, had inflated project costs and compromised Nepal’s efforts to monitor construction quality effectively.

Through its Belt and Road Initiative, a flagship program spearheaded by President Xi Jinping, China has extended over $1 trillion in loans and grants for various international infrastructure projects, according to several estimates. This initiative aims to enhance economic and diplomatic relationships with other nations while simultaneously creating a lucrative portfolio of construction projects for China’s state-owned enterprises. Yet, for many developing countries, these loans have turned into a financial burden, as they struggle to meet repayment obligations.