World Bank objects to change in quake grant modality

Published On: July 1, 2016 07:14 AM NPT By: Rudra Pangeni  | @rudrapang

KATHMANDU, June 30: The World Bank has objected to the government’s revision of the housing grants tranches, stating that such revision is against global best practices in post disaster reconstruction and build back better principles.The revision would provide an additional Rs 100,000 in the first tranche.

One day after the government bowed to the demand of the main opposition party and changed the distribution modality for housing grants, the bank has reminded the government of the principles agreed at the International Conference on Nepal’s Reconstruction (ICNR), held on June 25, 2015, between development partners and the government of Nepal for supporting the rural housing construction program.

The bank, the lead development partner in supporting the reconstruction, wrote a letter to Minister for Finance Bishnu Prasad Paudel on Thursday reminding the government of those principles designed to ensure that eligible beneficiaries receive and utilize construction grants for intended purposes and funds are disbursed against third party verification of milestones achieved, according to sources.

The government decided to distribute the housing grants in two tranches--Rs 150,000 and Rs 50,000, -- changing the three tranches modality of Rs 50,000, Rs 80,000 and Rs 70,000.

An excerpt from the letter reads, “These are the modalities through which the bank is authorized to provide financial support to the program,” according to a source. This indicates ‘serious dissatisfaction’ at the change of modality and the World Bank also fears changes in modality will possibly cause further delay in grants distribution.
The bank has offered half a billion dollars for the reconstruction work, including a fund of US $250 million for rural housing grants.

Other development partners involved in the rural housing reconstruction program are Japan International Corporation Agency (with $100 million credit), European Union, and a fund under the Multi Donor Trust Fund which is coordinated by the World Bank. USAID (US$ 9.6 million), Switzerland (Swiss francs 9 million) and Canada (Canadian $10 million) are in the MDTF. 

The World Bank has said that all those development partners also follow the same housing grants distribution modality.

A high-level official of a development partner in Nepal said that donors are very much concerned as changes in the grant distribution modality may lead to a compromise on build back better principles.

“The modality has a step-wise process from laying foundations in the first step, building walls and pillars in the second and finally roof work and finishing in the final,” added the source that did not wish to be named.

Out of over 550,000 houses damaged by earthquake, only 13,000 families have so far received the first tranche. Rajib Upadhya, senior external affairs officer at the Nepal office of the World Bank, confirmed that they have written a letter to the government on the issue of housing grants distribution modality but did not wish to give details.
Minister Paudel told Republica Thursday evening that he has not received the bank’s letter.

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