Govt fails to activate Reconstruction Fund

Kathmandu, Feb. 10: Although the Reconstruction Act, 2015, envisioned a separate fund for post-quake reconstruction, it has not come into effect even after 13 months of the promulgation of the Act and the establishment of the National Reconstruction Authority (NRA).

Failure in activating the fund has severe repercussions on mobilising funds for the reconstruction works.

The reconstruction body has had to make the rounds of the Ministry of Finance (MoF) in order to get the budget allocated, authorised and disbursed.

Former chief executive officer Sushil Gyawali had repeatedly said that the bureaucratic hassles in disbursing the money had delayed the reconstruction works.

Spokesperson of the NRA Yam Lal Bhoosal said that the future of the fund was unknown as there has not been any progress towards activating the fund.

Once the fund is activated, all the money dedicated to the reconstruction will come to it, and the NRA need not request the MoF to allocate budget and wait for the disbursement of the money.

All the money pledged by the international community at the International Conference on Nepal’s Reconstruction 2015 will also be deposited in the fund after signing an agreement with the concerned parties.

According to government estimates, Rs. 938 billion is needed for overall post-quake reconstruction and rehabilitation works.

Bhoosal said that there had been discussions about whether to operate the fund as per the Peace Trust Fund – the government established fund to facilitate the peace process after the Maoists laid their arms and entered the democratic system.

If the Reconstruction Fund is operated like the Peace Trust Fund, it will remain active for the next four years – one year of the five-year post-quake reconstruction period has already elapsed.

According to the Act, the fund’s money will be spent only on post-quake reconstruction, and the NRA must submit the annual financial report of the fund to the government.

Article 15 of the Act states that a separate fund for reconstruction would be established where money received from the government, the Prime Minister Disaster Relief Fund, organisations, associations or individuals and other sources would be deposited.

All the money received in cash or kind from all the stakeholders, including foreign citizens, governments or international agencies, will go to the fund.

The reconstruction body had prepared the Reconstruction Fund Management and Operation Procedure in July 2016, seven months after the promulgation of the Reconstruction Act, to channel funds into the reconstruction works.

According to the procedure, the income and expenditure of foreign cash or logistics support from the donors should also be included in the annual financial report which the reconstruction body submits to the government.

The NRA said that the Reconstruction Fund accounts would also be operated by the Financial Comptroller General Office (FCGO) and the money in those accounts would not freeze.

As per the procedure, there will be three different bank accounts to manage the money allocated by the government and received from other sources.

Foreign assistance received as grants and loans will be deposited into two different accounts in group ‘A’ account while money received from other sources will be deposited into group ‘B’ account maintained by the FCGO at the Nepal Rastra Bank.

Group ‘A’ accounts will be in foreign currency while group ‘B’ account will be in Nepalese currency.

As per the procedure, money received by the reconstruction body for special and sponsored programmes would be deposited in class ‘A’ commercial banks.

(Published in The Rising Nepal Daily, www.therisingnepal.org.np)