National pride projects’ costs skyrocket by Rs 1,050 billion, putting strain on state economy

Published On: April 6, 2024 07:45 AM NPT By: Dilip Paudel

KATHMANDU, April 6: The cost of the projects of national pride has increased by over Rs 1,050 billion due to the non-completion of their construction within the stipulated timelines, imposing a financial burden on the state.

Due to negligence of the contractor, political and legal complexity, lack of preparation, managerial weakness, disruption in resources for the project, land and road management, lack of regulation, coordination and political commitment, compensation dispute, COVID-19 pandemic, earthquake, and blockade, etc, the construction of the projects was affected.

It is mentioned in the half-yearly review report of the budget published by the Ministry of Finance that the initial costs of the projects of national pride was Rs 1,284 billion, but now it has increased to Rs 2,346 billion. From this, it seems that the initial costs have increased by Rs 1,061 billion.

Bishwo Poudel, a former vice-chairman of the National Planning Commission (NPC), said that due to the lack of political commitment, national pride projects are not completed on time. He said that the projects have been delayed due to financial and non-financial hurdles.

“It is not enough just to announce a project,” he said, “Effective monitoring should also be done.” Poudel is of the opinion that the NPC, which monitors these projects, has also been weakened. “There is also a lack of resources in the projects,” he said, “The areas affected by the projects have been extended due to issues related to environmental impact, and compensation, etc.”

Even when a project is about to reach two decades of commencement, the cost has increased up to three times when it is not completed on time. The initial cost of Mahakali Irrigation Project, a national pride project, which was started in the fiscal year 2063/64 BS, was Rs 11.27 billion. Due to the delay in the construction of the project, the revised cost has tripled to Rs 35 billion.

The project, which was started to irrigate an area of 33,520 hectares, has not been completed on time, so the general public are also deprived of irrigation facilities. Not only the Mahakali Irrigation Project, the cost of the Bheri Babai Diversion Multipurpose Project has more than doubled from Rs 16.43 billion to Rs 36.80 billion.

There is a possibility that the cost of the project, which has seen only 62 percent physical progress by the fiscal year 2079/80 BS, will increase further.

There is also an increase in the tendency of forgetting the project after awarding the contract. Even the line ministers do not seem to be committed to completing the projects on time. There is also a lack of resources in some projects. 

The initial cost of the Sikta Irrigation Project was Rs 12.80 billion, which has now increased to Rs 25.2 billion. The cost of the Rani Jamara Kulariya Irrigation Project increased from Rs  12.37 billion to Rs 27.70 billion; the cost of Sunkoshi Marin Diversion Multipurpose Project increased from Rs 46.19 billion to Rs 49.42 billion and the cost of the Melamchi Drinking Water Project increased from Rs 24 billion to Rs 31.36 billion.

Similarly, the cost of Pushpalal (Mid Hill) Highway has increased from Rs 33.36 billion to Rs 84.33 billion and the cost of Postal Highway has increased from Rs 35.20 billion to Rs 101.9 billion.

Similarly, the cost of the Kaligandaki (Gaidakot-Ramdi-Maldhunga) Road Project has increased from Rs 17 billion to Rs 20 billion, the cost of the North-South Corridor Project has increased from Rs 4.10 billion to Rs 15 billion.

The cost of the Kathmandu-Terai Fast Track Project has increased from Rs 100 billion to Rs 211 billion while the cost of the Upper Tamakoshi Hydropower Project has increased from Rs 35 billion to Rs 54 billion.

Joint Secretary Yamlal Bhusal of the NPC said that the costs of projects have increased due to multi-faceted problems. “Some projects suffer from weak monitoring from the line ministries,” he said, “ Now we have made a plan for effective monitoring.”

He said that the procedure for monitoring large projects has been prepared and has reached the stage of approval.

According to the Ministry of Finance, there are various challenges to complete the projects of national pride within the stipulated time. According to the ministry, the projects could not be completed within the specified time periods, so the initial estimated costs have increased. The ministry has also stated that there has been no coordination between inter-governmental agencies and levels during the implementation of the project.

There is a lack of civic, managerial and political oversight from project selection to construction and post-construction stages. The ministry said that a monitoring and evaluation law should be formulated and implemented on time, the law related to the faster construction and development of infrastructure projects should be formulated and the contract management should be made agile and sound.

It seems that policy reforms are also needed to make the projects result-oriented and complete them on time.  The concerned stakeholders claimed that there should be an integrated policy and legal arrangement to manage the issues related to land compensation, displacement, settlement relocation and rehabilitation under the projects.

To complete the projects on time, there should be budget assurance, manpower management, and good governance. It has been too late to establish relevant compensation of the land to the residents of the affected areas, to coordinate and cooperate with stakeholders, and to increase participation and effective monitoring and evaluation to eliminate the disruptions that may occur in the projects.

For the current fiscal year, the government has allocated Rs 65.64 billion for national pride projects including Rs 2.43 billion for recurrent expenditure, Rs 56.35 billion for capital expenditure and Rs 6.85 billion for financial management.

Among the national pride projects, Gautam Buddha International Airport, Pokhara  Regional International Airport, and Upper Tamakoshi have been completed. The West Seti Hydroelectric Project has been delayed due to the lack of preparation of construction methods while compensation distribution continues for the Budhi Gandaki Hydropower Project.

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