El Paso watched a potential $160 million economic windfall evaporate after the National Science Foundation pulled the plug on a UTEP-led Paso del Norte Regional Innovation Engine in August 2025, canceling the award, yanking back the initial $15 million, and sending the money elsewhere. The project had already been on ice since spring 2024 while NSF reviewed concerns about the proposal, a pause that left local leaders scrambling to figure out what went wrong. Months later, the NSF Office of Inspector General quietly wrapped up its own review and told the project’s principal investigator that investigators had not substantiated the allegations that had kicked off the probe.
NSF ended the award and pulled the money
NSF formally terminated the Paso del Norte award in August 2025 and withdrew the initial funding, cutting off a project that organizers said might have ultimately reached $160 million in federal support, according to El Paso Matters. The outlet reported that most of the original $15 million was reallocated and that none of the first tranche was actually spent. An NSF spokesperson told reporters the project could not keep going because “sufficient funds are no longer available to support the project as originally envisioned.”
Inspector general cleared the principal investigator
The NSF Office of Inspector General notified principal investigator Ahsan Choudhuri that investigators “did not substantiate the allegations” that launched the review, a finding reported by KVIA. The letter, dated in early February 2026, arrived long after NSF had suspended the award in April 2024 and then canceled it in 2025. Choudhuri said the decision cleared his name but noted that the timing meant it did nothing to rescue the Engine that had already been scrapped.
How the grant unraveled
NSF initially awarded the Paso del Norte Engine to a coalition led by UTEP in January 2024. Within months, the project was paused after an internal UTEP review questioned whether some resources highlighted in the proposal, including hangars at Fabens Airport and access to test land, were in fact available, according to El Paso Matters. At the same time, personnel changes and a governance review at the university shook confidence in the project and contributed to departures from the aerospace leadership team. The project’s award page lists UTEP as the lead organization for the Paso del Norte Engine (award NSF-2315782), per the NSF.
Audit records and campus tensions
Even before the Engine controversy, UTEP’s Aerospace Center was drawing internal scrutiny. A 2023 audit by The University of Texas System identified control weaknesses and issues with procurement and hiring at the center, according to the system’s audit report. That backdrop, combined with the university’s 2024 review of the NSF proposal, helped fuel leadership exits and retirements, including co-PI Ryan Wicker’s November 2024 retirement, as reported by Open Campus. Critics argue that overlapping internal audits, federal reviews, and administrative maneuvering created a governance mess that neither NSF nor the university resolved before the award was ultimately canceled.
Political fallout and next steps
Local officials and elected leaders in El Paso have been pressing for explanations. Congresswoman Veronica Escobar called the loss “a once-in-a-generation federal investment” for the region and faulted university leadership for derailing the Engine, according to a statement from her office. UTEP has said it carried out internal reviews and has not offered additional public details about personnel decisions tied to the proposal.
Where things stand now
Choudhuri has since retired from UTEP and launched a private company, ARC Aerospace, and says he remains focused on helping build up the region’s defense and aerospace economy. The NSF inspector general’s finding means the OIG did not publicly substantiate misconduct tied to the investigation, but the award itself is gone, and local leaders say the economic shot in the arm disappeared with it. Local reporting notes that Choudhuri incorporated ARC Aerospace in mid-2024 and retired from UTEP in December 2025, and officials are now looking for other ways to grow the sector, per KVIA.
