NRA set to suffer budget crunch

Kathmandu, Dec. 4

The post-quake reconstruction is likely to get a setback by the looming budget crisis. 


According to the revised Post-Disaster Reconstruction Framework (PDRF), the total rebuilding needs Rs. 630 billion, but only Rs. 230 billion has been spent so far while the National Reconstruction Authority (NRA) has only a year to wrap up the work since its five -year tenure is expiring in January 2021. 


The situation is not going to improve this year either since reconstruction body is running short of Rs. 38 billion in the total budget announced for the current fiscal year 2019/20. The Ministry of Finance (MoF) has allocated Rs. 141 billion for the reconstruction of private houses and some critical public infrastructure for this year. 


The budget is allocated without resource assurance. 


The total budget includes Rs. 34 billion from Indian line of credit announced in the International Conference on Nepal’s Reconstruction in the immediate aftermath of the earthquake, OPEC Fund for International Development (OFID) and World Bank. But while the Indian loan pledged to reconstruction is allocated for other infrastructure, the money from OFID and WB will not be mobilised. 


The NRA was planning to build 1806 schools, 205 heritages, 152 health posts and seven prisons from the Indian credit, but the MoF has already allocated Rs. 50 billion to other infrastructure following the revision of the agreement that allowed the government to use the support in the areas other than the reconstruction. 


“The NRA does not have the resource guarantee for the post-quake rebuilding this year. Of the Rs. 34 billion allocated to reconstruction, we can use only Rs. 3 billion. The NRA has no source to make up the gap,” said Shiva Hari Sharma, Secretary of the NRA. 


The reconstruction body has asked the MoF to provide the budget from other sources, but the ministry has not assured money for the same. 


Similarly, the government was expecting Rs. 5 billion support from OFID in the reconstruction of private houses which is not happening. It will create challenges to mobilise the grant to the beneficiaries. 


Likewise, the government was planning to launch livelihood programmes, skill training and entrepreneurship support in the quake-affected areas with Rs. 2 billion assistance from the WB. 

Sharma said that the aim of the programme was to support the vulnerable families with income generation options. The shortage of the money will hamper the long-planned programmes on livelihood support which was expected to help especially the poor. 


Another Rs. 1 billion support from WB on enhancing the capacity of the local bodies on Disaster Risk Management has been also cancelled. 


Meanwhile, the parliamentary panels have directed the NRA to ensure the remaining resources as the reconstruction would not be completed with the available resources. 


Chief Executive Officer of the NRA Sushil Gywali said that the reconstruction body was in discussion with the National Planning Commission and MoF in an effort to manage the additional funds, and a deal was being finalised with the WB for USD 200 million. 


The NRA is expecting to receive the money within the current fiscal year so that it could implement the pending programmes and expedite the reconstruction of private houses. 


The WB support would be a multi-year support which could be used in 2-3 years. 


Recently, the NRA has added 4,644 beneficiaries of the reconstruction grant, increasing the cost by Rs. 1.39 billion. It also added 2609 new retrofitting beneficiaries and 410 potential grant recipients which demands additional budget of Rs. 260 million and Rs. 123 million respectively.


Published in The Rising Nepal daily on 5 December 2019.