Controversy in Nepal over China's BRI project

A controversy has erupted in Nepal over Chinas Belt and Road Initiative (BRI) after the Chinese Embassy in Kathmandu unilaterally declared that the Pokhara International Airport is a "flagship project of China-Nepal BRI cooperation".

At a time when Nepali and Chinese officials themselves admitted that not a single project under the BRI, the multi-billion dollar flagship project of Chinese President Xi Jinping, has been signed in Nepal under the BRI framework, a recent announcement made by the Chinese side in Kathmandu has courted a huge controversy.

The airport was constructed upon a Chinese loan which was inaugurated by Prime Minister Pushpa Kamal Dahal 'Prachanda' on Sunday but a sudden announcement made by the Embassy on the day of inauguration has created spirals of controversy in Kathmandu.

A day ahead of the inauguration, the Embassy said: "This is the flagship project of China-Nepal BRI cooperation. Warmly congratulations to Nepali Gov and Nepali people!"

On the day of the inauguration, the Charge d'Affaires Wang Xin said: " 2023 is the 10th anniversary of President Xi Jinping's proposal of BRI Initiative. Under the guidance of the two heads of state, we will jointly build the trans-Himalayan Multi-Dimensional Connectivity Network, and let the BRI cooperation bear fruitful results."

According to Nepali media reports, Prime Minister Dahal on Wednesday also expressed concern over why and how this issue surfaced now.

Dahal had expressed concerns about whether the Pokhara airport does belong with BRI or not and was also surprised over the statement made by the Embassy, according to Pradip Adhikari, Director General at Nepal Civil Aviation Authority.

The Prime Minister also did not mention the construction of the project under the BRI during his inaugural speech on the first of the opening of the project in Nepal's lake city.

Political party leaders also expressed concerns over China's abrupt and sudden statement about the Pokhara airport and unnecessarily linking it with the BRI.

The government of Nepal signed a $215.96 million soft loan agreement with China in March 2016 for the construction of the new airport in Pokhara.

After Nepal and China signed the framework agreement on BRI in 2017, Nepal initially selected 35 projects to be undertaken under President Xi's flagship connectivity project.

Later, upon Beijing's request, the total number of projects had whittled down to nine with the Pokhara airport off the list.

"I have a question on what basis the Chinese Embassy CDA said that Pokhara airport is built under the framework of BRI," former Foreign Minister and UML's deputy general secretary, Pradeep Gyawali told an online news portal.

He added that negotiation of the Pokhara airport with Chinese begun from 2010 before China launched the BRI so how it comes under the framework of the BRI.

Nepal and China signed the BRI framework agreement in 2017 while the loan agreement between China's EXIM Bank and the Civil Aviation Authority of Nepal (CAAN) was signed in 2016.

"I could not understand on what basis the Chinese CDA issued the statement on BRI and Pokhara airport," said Gyawali.

China's Exim Bank had agreed to provide 25 per cent of the loan free of interest and set the interest rate at 2 per cent per annum for the rest of the amount, with a payback period of 20 years.

But the government has not made its position clear on BRI and its link up with Pokhara airport as claimed by the Chinese side.

Er. Pradeep Adhikari, Director General of CAAN, said that "since no Chinese document said that Pokhara airport was built and constructed under the framework of the BRI, we do not need to bother".

"This project does not have any geopolitical linkages... The Pokhara airport commenced much earlier than we signed the BRI framework with China," he added.