Govt needs about Rs 670 billion for reconstruction

share of disaster effects across sectors

KATHMANDU, June 20: Nepal needs Rs 669.5 billion to fund its reconstruction as the country rebuilds itself after the April-25 earthquake -- the estimated total being about a third of the country's GDP -- the National Planning Commission (NPC) said Friday. The estimate includes the amount needed for rebuilding public infrastructure -- roads, health posts, government schools, and utilities, among others -- to historical and cultural heritage sites, private sector infrastructure, and compensation and other forms of support to the general public.

The executive summary of Post Disaster Needs Assessment (PDNA) was made public by NPC has put the figures of damage from the disaster at Rs 517 billion and loss of foregone earning at Rs 189 billion.

The summary said that over a million houses were destroyed and valued the damage at Rs 363.24 billion. Rebuilding these would cost around Rs 327 billion, it said.

As of Friday, June 19, over 8,790 were recorded as dead and 22,300 were recorded as injured, the report says. It has named fourteen districts as 'crisis-hit' while 17 others districts have been labeled as 'partially damaged'.

The full PDNA report is at the printers' and will be made public within a day or two, according to an NPC official.

NPC says the government needs Rs 39 billion for the rebuilding of the education sector infrastructure while the tourism and finance sectors will need Rs 38 billion and Rs 33 billion respectively.

The report estimates that rebuilding and renovating cultural heritage sites hit by the quake will cost Rs 20 billion.

"Hundreds of historical and cultural monuments at least a century old were either destroyed or extensively damaged," the report says.

FURTHER RIPPLES

The report has also warned that the quake has caused more than just material harm to its citizens and the country -- damages which will be seen further down the road.

"The earthquake will end up pushing an additional 2.5 to 3.5 percent Nepalis into poverty in 2015-2016 which translates into at least 700,000 additional poor," the report.

In addition, the loss and damage to the country's economic growth in the current fiscal year is expected to be the lowest in eight years, at 3 percent, according to the report.

PUTTING IT TOGETHER

The government has a few options in hand to collect the fund -- increase revenue collection, internal borrowing, limit regular spending and -- the most important one -- seek foreign assistance.

The PDNA summary says revenue collection will be directly affected by the earthquake. It expects actual collection to fall to Rs 390 billion in Fiscal Year 2014/15 from the Rs 423 billion projected by the government when it announced the budget.

The drop will also continue to have an effect on the next budget.

NPC has also made changes to its budget preparations for Fiscal Year 2015/16 following the quake.

It has revised the budget ceiling to Rs 841 billion. To meet the funding gap in reconstruction works, NPC has also directed ministries to cut their current expenditure by 15 percent -- which would total approximately Rs 68 billion.

The government is making an appeal to the donor community in an international donors' conference scheduled to be held in June 25 in Kathmandu.

Speaking at an event on Thursday, Finance Minister Ram Sharan Mahat said he has been appealing to the donor community for their help to be extended as grants rather than loans.

Government officials say internal borrowing should be limited to 3 percent of GDP as a norm or should be such that the borrowing will not disrupt liquidity of financial markets.