'EU siphons off govt grants to UN agencies, NGOs and INGOs'

Published On: October 8, 2018 03:15 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Oct 8: Former Finance Minister Surendra Pandey has criticized the government for not regulating development partners who have siphoned off grants money, meant to be spent through the Government of Nepal, to NGOs, INGOs and UN agencies.

Pandey revealed that the European Union (EU) has diverted US$ 360 million in the recent years to those agencies while the government has been looking for loans. The Government of Nepal had signed agreements for receiving the amount in grants, Pandey said.

Speaking at the parliament's Finance Committee, Pandey blamed the government for allowing the EU to distribute grants to other agencies.

"UNICEF is implementing a program of nutrition with EU grant of $ 22 million while the British Council has been spending $ 20 million in grants for technical and vocational education," added Pandey.

Likewise, agencies from Finland have spent another $ 20 million in grants, which was meant to be spent by the government agencies, according to Pandey.

Pandey, a leader of the ruling Nepal Communist Party, brought the issues to the attention of Finance Ministry officials on Sunday. Revenue Secretary Shishir Kumar Dhungana said they will take stock of the matter.

Pandey claimed that other development partners including the DFID and USAID were also diverting funds. Talking to Republica, he said: "This is a height of stupidity on part of the Finance Ministry and other government officials to allow development partners to use grants money on their own, while the government is looking for loans."

"The government should use the grants money through its own agencies and also meet fund requirement by bringing in foreign aid in the form of loans," Pandey added.

A statistics of the Ministry of Finance shows that the EU has spent $ 271 million in the last four fiscal years, while the commitment was in the tune of $ 378 million. Thirty percent, or $ 80 million, of the total grants spent in those four years has been spent via 127 programs through different NGOs and INGOs. Agencies of the government have spent $ 191 million.


Parliament's Finance Committee has directed the Ministry of Finance to ensure that the contract process of all development works are completed by mid-December. It also said that capital spending should be at least 60 percent by mid-January, and 90 percent by mid-May. Capital spending in the last month of the fiscal year (mid-June to mid-July) should be limited to 10 percent, the committee has directed the government. Fiscal year begins in mid-July.

These measures, according to the committee, should be taken to end the trend of spending most of the budget in the last quarter and the last month. The committee has also directed the government to make civil contractors fully responsible in development projects and to implement payment systems across the country wherever possible.

In the meeting focused on implementing government budget and programs, Former Finance Minister Bishnu Prasad Paudel criticized the government for inserting development projects in the middle, going beyond the budget speech and scheduled programs. He criticized it as a tendency to bypass the parliament in the budget-making process.

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