KATHMANDU, JULY 23: A huge share of public spending is simply misallocated among scattered projects that have long stopped delivering results.
One glaring example, according to Deependra Bahadur Kshetry, former vice-chairman at the National Planning Commission (NPC), is the design and execution of 48 development schemes that are currently under the purview of the Ministry of Federal Affairs and Local Development (MoFLAD).
Some of the multi-million rupee projects being implemented by MoFALD, including projects related to nutrition, road construction in rural areas, and water and sanitation, have been widely criticized for being ineffective in delivering targetted results, he said. "The ministry, however, has continued these projects without rigorous revision, and some projects are even duplicated."
Out of 48 projects for the fiscal year 2016/17, various donors have invested Rs 14.90 billion in grant and Rs 3.57 billion in loan for the implemention of 18 different projects related to rural infrastructure, water supply, nutrition, irrigation and others.
The government has allocated Rs 116.73 to MoFLAD for the current fiscal year,which is 11.12 percent of the total budget.
MoFLAD is given many projects due to its established delivery mechanism, including District Development Committees (DDCs) and Village Development Committees (VDCs), according to Rameshore Khanal, a former finance secretary. Lack of elected representatives, however, has contributed diminishing accountability in local development initiatives, according to him.
"It has been more than 19 years since our local bodies have been running without elected representatives, and as a result, project implementation lacks effective monitoring and evaluation," he said.
All-party mechanisms have been created at the local level. "But the integrity of these mechanisms has been questioned many times for their involved in misuse of resources," Kshetry said. Last minute spending and complaints regarding low quality work on a daily basis at many projects show how resources are misused, he added.
In many cases, the same group of bureaucrats, consultants and concerned parties design the projects and they themselves prepare evaluation reports to show huge success on the ground, he said.
Several reasons are cited for the continuity of scattered programs without any evaluation of efficiency. Employees who lead the donor-funded projects get additional allowances and perks, Khanal told Republica.
"The ministry concerned should in principle design development projects that take into consideration our development needs and secure approval from the International Economic Cooperation Coordination Division of the Ministry of Finance," he said. "But donors are involved in designing projects before taking any consent from the Finance Ministry."
Another reason is that no political party will agree to discontinue a program introduced by their government even if the program is not performing well, he said.
Consecutive governments are hell-bent on a distributive approach while introducing new programs, Dr Swarnim Waglé, former member of the National Planning Commission (NPC), said, adding that they neglect crucial aspects of project discipline such as efficiency, institutional capacity and effectiveness.
According to Waglé, duplication of projects results in waste and costly administrative practices that unnecessarily multiply planning, design, operation and management overhead. But they are still pursued because they benefit party cadres.
The intent of most parties in government is to distribute largesse, extract rent and expand patronage, he said, adding that political parties are not serious about the implemention of development projects. This explains the continual expansion of piecemeal programs that are almost identical in nature.
Waglé suggested immediately initiating a coordinated approach to reduce duplication. To avail of scale economies, Nepal must urgently consolidate local development efforts, and the role of the National Planning Commission (NPC), Ministry of Finance (MoF) and MoFLAD are key, according to him.
Federalism is not just about creating provinces and drafting laws. It is an opportunity to overhaul development effectiveness, he said.