Rs 5b fund unused, Bagmati project dependent on ADB grants

Published On: September 18, 2017 07:15 AM NPT By: Khilak Budhathoki

KATHMANDU, Sept 18: For every house or land bought or sold inside the Kathmandu Valley, an additional 5 percent tax is levied and this tax amount goes directly to the Bagmati Civilization Fund, which was created to raise funds for the Bagmati River Basin Improvement Project (BRBIP). 

Although the Land Revenue Office of Kathmandu has collected over Rs 5 billion for the fund in the last eight years, the project is still relying on grants and donations.

The Department of Land Reform and Management confirmed that the Bagmati Civilization Fund has a total of Rs 5.003 billion as of fiscal year 2016/017. 

However, in a move that cannot be explained logically, the government has chosen to take the project forward with hefty loans from the Asian Development Bank (ADB) instead of mobilizing the fund created for the project. 

The High Powered Committee for Integrated Development of the Bagmati Civilization, a committee responsible for carrying out developmental activities in Bagmati River and surrounding areas, is running the first-phase Bagmati River beautification campaign from Gokarna to Sinamangal (7 kilometers) which is estimated to cost Rs 3.6 billion. The government has allocated Rs 600 million for the campaign, while the committee relies on Rs 2.55 billion loan from the ADB.

The beautification campaign includes a clean-up campaign, sewage management among other works around the Bagmati River. The government is reluctant to use the money deposited in the Bagmati Civilization Fund which could have covered the cost without any need for ADB loans. ADB is again expected to provide the remaining Rs 450 million needed to cover the campaign’s cost.

“Even though funds have been collected from the general public, we are forced to rely on grants to run the project,” said BRBIP chief Jyoti Kumar Shrestha. He confirmed the government’s reluctance to release the money from the Bagmati Civilization Fund, which was started in fiscal year 2008/09 by the then Finance Minister Baburam Bhattarai.

The Ministry of Finance (MoF), on the other hand, said there is no need to release the money in the fund. “We have been allocating funds every fiscal year through a separate budget for the Bagmati campaign. So why is there any need to allocate funds from the Bagmati Civilization Fund?” asked Bishnu Prasad Nepal, chief of MoF’s revenue department.

BRBIP chief Shrestha says that the money collected for the Bagmati project should be used only for the project. 

“Otherwise there is no need to trouble millions of citizens by charging them the additional fees in the name of Bagmati project,” he said.

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