New agreement could further delay grant distribution

Published On: June 30, 2016 01:10 AM NPT By: Nabin Khatiwada

KATHMANDU, June 30: Main opposition Nepali Congress, which was obstructing the parliament proceedings demanding distribution of housing reconstruction grant of Rs 200,000 in one tranche to quake victims, agreed to end the obstruction as the government put forward the credit conditions reached with the World Bank under the housing reconstruction project.

Prime Minister KP Sharma Oli, addressing the Parliament after reaching an agreement with the main opposition NC to provide the grant to quake victims in two installments, said that the plan on grant disbursement signed with the donor agency, bars the government from providing the total sum in one installment to quake victims.

He added that the government needs to take consent from donor agencies on amending the work plan.

The World Bank is the major donor supporting the housing reconstruction project. The World Bank Group on June 23, 2015 had announced that it would provide up to half-a-billion dollars to finance the reconstruction of Nepal.

The financing process includes 200 million dollars credit from the International Development Association (IDA), the World Bank's fund for the poorest countries, for housing reconstruction in poor rural areas.

Likewise, the World Bank had set up Multi-Donor Trust Fund (MDTF) to coordinate their finance for housing reconstruction. JICA, Switzerland and Canada have committed to finance the MDTF.

The credit agreement between the Government of Nepal and the World Bank includes conditions of conducting house-by-house damage assessment and eligibility survey, signing of a participation agreement between eligible beneficiaries and the government,  providing housing grants in multiple tranches through bank accounts, releasing subsequent  tranches based on progress achieved in resilient construction and conducting comprehensive, multi-tier and hands-on training.

Martin G Rama, the acting country director of the World Bank, had sent a letter to Finance Minister Bishnu Prasad Paudel on December 20, 2015 and inquired on sequencing of the first disbursement of housing grants. In the letter, Rama had categorically mentioned the five credit conditions.

A high-level government official said that the government has to start a process of taking the consent of the World Bank immediately following the agreement between the government and the main opposition for resumption of parliament proceedings.

"The credit condition has categorically maintained that the grants should be provided in multiple tranches, which means more than two tranches. The provision was set to persuade quake victims for constructing quake resilient housing," said the official at National Reconstruction Authority (NRA).

"Following the agreement between the government and main opposition, the government should either take the consent from the World Bank and amend the existing work plan or look for other resources for the grants. This could certainly take some time and further delay the process of providing grants," the official added. 

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