Pokhara Airport: a story of strategic priority set in the mountains of Nepal

Forty years after the idea was born, a soft loan from China has seen the Pokhara international airport finally break ground. As well as strengthening the Nepalese economy and the local tourism trade, the project says a lot about the changing nature of power in the region and the strategic priorities of China and India. Rod James investigates.


Pokhara tourismFew issues cause as much discord and division as plans to build or expand an airport. The melange of economic, political, environmental and social issues that such projects throw up mean that, even if all sides of the argument are taken into account, someone is still likely to end up deeply unhappy.

The same is true in the case of the airport being built in Nepal's second city of Pokhara, though in this instance it is not the local people who are wary of the project, but rather a neighbouring government. A popular base for hikers and climbers, land was first set aside for a new airport there 38 years ago, but weak political will and the financial and technical challenges posed by the Himalayas meant the project never took off.

In 1989 JICA, the Japanese development agency, drew up plans for a 2,500m-long, 50m-wide runway, but this was rejected as being too small to accommodate larger, long-range aircraft. Now, finally, the Pokhara International Airport is to begin construction, making it the country's second international hub after Tribhuvan Airport in Khatmandu.

Long wait over for vital international airport

"The head of the Nepal Hotel Association even went on hunger strike to try and force the government's hand "

For many, this day could not have come too soon. A Facebook group calling on followers to "lobby the government to sign a loan with a Chinese bank" in order to fund the project has gathered 3,636 likes, and in 2013, the head of the Nepal Hotel Association, Bidlap Paudel, even went on hunger strike to try and force the government's hand into green-lighting a project that he and many other business leaders believed could light a fire under the city's tourism trade.

"It's not just Pokhara's tourism potential that justifies the need for a new airport," said former Nepal chamber of commerce chairman Ananda Raj Mulmi to the Nepal Times in May 2012. "The whole country needs an alternative international airport and the one in Pokhara can be built quickest and for the least cost."

In the end it took more than economics to finally force the project along; in April 2015 an earthquake struck resulting in 8000 people losing their lives. Rescue work in the aftermath of the quake was hindered by poor airport infrastructure, with large parts of the country going days without help.

Tribhuvan Airport eventually had to ban large planes from landing as frequent arrivals of aircraft laiden with aid were damaging the runway, leading to exasperation from international agencies and the Nepalese people. The tourism industry of Pokhara is struggling to get back to pre-earthquake health, further intensifying calls for the airport.

The social media demand for a Chinese banking partner was based on the fact that Nepal's government had been in discussions with the Export Import Bank of China over a possible loan deal since 2014, but to no avail. Finally, in January 2016, the Nepalese government agreed a 20-year NPR 21.6bn ($209m) soft loan with the state-run export finance institution, with 25% of the handout designated interest-free, according to a spokesperson for the ministry of finance.

The loan will be granted to the finance ministry, which in turn will on lend to the Civil Aviation Authority of Nepal with an interest rate of 8%. Development of the 2,000-hectare site will be carried out by China CAMC Engineering.

"The people of Pokhara are very supportive and they want the project to go ahead at any cost, and so do the Chinese," said Pradeep Adhikari, who will be managing the project.

Interestingly, the new airport's runway will be slightly smaller than the one proposed by the JICA in 1989, at 2,500m by 45m. This allows it to handle medium-sized aircraft such as the Boeing 757 and Airbus 320 but none larger, suggesting that the government's ambitions have been somewhat downsized since the late 1980's. However, the airport deal needs to be seen in a broader geopolitical context.

Proxy battle of two superpowers: China and India

Nepal borders India on three sides and Chinese Tibet to the north. It has for long lied within the Indian sphere of influence, a matter that has often grated with the Nepalese people. According to Rajeev Ranjan Chaturvedy and David M Malone, writing in 2012 book Nepal in Transition: People's War to Fragile Peace:

"Building an international airport with Chinese money seems to be another way of telling India that it's influence on Nepal is waning"

"Nepali resentment of Indian domination has impinged directly on India's effort to uphold its special security relations with Nepal. Indian economic, political and cultural influence on Nepal has been and remains pervasive, producing at best ambiguous sentiments in Nepal."

Recently relations have become more fraught than they have been for decades. Thirty percent of Nepal's population is made up of the Madhesis people, an ethnic group of Indian origin. Between September and February they used trucks and cars to blockade vital supply routes connecting India and Nepal in protest against the new Nepalese constitution, agreed in September, which they claim doesn't afford them enough rights. The Nepalese government accused India of tacitly supporting the protestors, creating a rift between the two and opening an opportunity that China had long been looking to take advantage of.

In late March the governments of Nepal and China signed 10 agreements including a landmark deal that will gives Nepal access to the port of Tianjin, allowing it to lessen its reliance on India, through which 98% of its trade currently moves. On signing the deals prime minister KP Sharma Oli said somewhat grandiosely that "Nepal's relationship with China is higher than the Mount Everest, and superior than the Great Wall".

The building of an international airport with Chinese money seems to be another way of telling India that it's influence on Nepal is waning, even though the prime minister has insisted that he is not "playing the China card". Whatever the truth, the Pokhara airport project is a central part of a fascinating proxy battle between two rising powers.