Ex-finance minister Karki, 13 others charged in Pokhara airport tax waiver scam

The Kathmandu Post reports on a significant development in Nepal's fight against corruption, with the Commission for Investigation of Abuse of Authority (CIAA) filing charges against former finance minister Gyanendra Bahadur Karki and 13 others. This case, centered on alleged irregularities in tax exemptions during the construction of the Pokhara International Airport, highlights a persistent issue of graft that has plagued major development projects in the country.

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The CIAA has accused them of causing a loss of Rs3.62 billion to the state by granting tax waivers in violation of the original procurement agreement.

The CIAA's accusation that the defendants caused a loss of Rs3.62 billion to the state by granting unlawful tax waivers to the Chinese contractor, China CAMC Engineering Co Ltd, underscores the scale of the problem. The report details how the waiver allegedly violated the original procurement agreement, which stipulated that the contractor should bear all applicable taxes. This suggests a potential collusion between officials and the foreign company, undermining national interests for personal gain.

What makes this case particularly noteworthy is that it is the third corruption investigation linked to the Pokhara International Airport project. Previous cases have already implicated dozens of individuals, including former ministers and high-ranking officials, for issues ranging from inflated contract costs to other alleged malpractices. The repeated nature of these accusations points to systemic problems within the procurement and oversight processes for large-scale infrastructure projects, often involving foreign investment.

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the defendants colluded to provide unlawful tax exemptions to the Chinese construction company despite provisions in the original contract requiring the contractor itself to bear all applicable taxes, customs duties and fees.

From a Nepali perspective, these developments are deeply concerning. While the airport was intended to boost tourism and economic growth, its construction has become mired in controversy and allegations of corruption. The involvement of a Chinese contractor and the subsequent tax waiver issues also raise questions about the transparency and fairness of international development partnerships. The public's trust in government institutions and the integrity of major projects is at stake, and these investigations, while painful, are a necessary step towards accountability and reform.

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This is the third corruption case linked to the Chinese-funded Pokhara airport project.