A high-ranking government official said the concept of creating the all powerful Authority, which will initially focus mainly on six major infrastructure development sectors, was floated in response to the frustrating development expenditure witnessed during the current fiscal year.
River training, roads, hydropower, railways, airports, and townships and economic zones development are the infrastructure sectors that the proposed Authority will deal with, according to the official.
The government in its budget for the current fiscal year earmarked Rs 73.52 billion for cash expenditure on capital heads. However, the government has been able spend only Rs 17.92 billion, which is seven percent less than the last year’s expenditure, so far. As a result, the government has huge unspent cash reserve totaling over Rs 25.5 billion, more than double in the previous year.
The proposal of setting up the Authority had already been briefed to the Prime Minister and other senior ministers and all of them had responded positively, said the official. He added that the Ministry of Finance was planning to take of the proposal to the cabinet for final endorsement within a week.
As per the plan, the government will initially inject Rs one billion as its equity contribution and by the end of current fiscal year it will invest at least Rs three to five billion as grants to the Authority.
“In addition to Rs three billion non-interest bearing funds that the government will earmark for the authority each year, the Authority will also get capital budget savings (unexpended) at the end of each fiscal year in the form of non-interest bearing loan. “Thus it is expected that the authority will have an additional capital of Rs six to eight billion from the government,” according to a concept paper on the Authority.
Likewise, the authority will have the right to mobilize domestic resources by issuing 15 to 20 years government-guaranteed bonds and upon completion of expressways, airports, townships and hydropower projects, the authority will use them to earn revenues on fully commercial basis.
“The government will not make any intervention in pricing decisions and the authority will function as a private sector company,” reads the concept paper.
The paper has also sought special power to the Authority to directly negotiate with competent construction contractors and expedite the construction of three projects -- Nijgadh Airport, Kathmandu-Nijghadh Fast Track and Upper-Seti Hydropower Project.
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