Weak performance of pride projects leads to poor capital expenditure

Kathmandu, Feb. 14

Poor performance of the national-pride projects was the major contributor to the poor capital expenditure in the first six months of the current fiscal year 2019/20.

The government could spend only 19 per cent – Rs. 20.4 billion from Rs. 102.08 billion allocation to the pride projects – by mid-January, according to the Finance Ministry's report of the mid-term review of the budget.

Given the size of the total capital expenditure, pride projects have got a significant chunk, almost 33 per cent, of the total budget.

The total recurrent and capital expenditure for this year is Rs. 309.6 billion and Rs. 62.7 billion and financial provision is Rs. 50.1 billion – 32.4 per cent, 15.4 per cent and 29.9 per cent respectively.

Finance Minister Dr. Yuba Raj Khatiwada had announced the budget of Rs. 1.53 trillion. The government had mobilised Rs. 422.5 billion in the first six months of the current fiscal year (mid-July to mid-January). This is 27.6 per cent of the total budget.

Of the 22 pride projects across the country, six could spend less than 10 per cent of the total allocation, with zero progress in Pashupati Area Development Trust and Nijgadh International Airport.

Kathmandu Terai Expressway project has utilised only 2 per cent of the Rs. 15 billion. The shortest road to connect the capital city with the Terai that will have Asian Highway Standards was supposed to be completed in the next couple of years. But the Detailed Project Report of the expressway project is recently developed. According to the experts, the road project will be delayed by at least two years.

Likewise, Millennium Challenge Account Nepal – a project established with the United States' pledge of US$ 500 million to construct the cross-border transmission line and rehabilitation of the strategic roads – has spent only 4.4 per cent of the total budget of Rs. 10 billion.

The project has to be launched by June end this year, but it is stuck due to the delay in ratifying the programme from the Parliament as per the agreement reached between Nepal and the USA.

A section of society has been rallying against the project for the very reason of getting it approved from the legislature.

Another large project Budhigandaki Hydroelectricity Project has witnessed just 7.5 per cent progress in the first half of the current fiscal. The would-be the largest reservoir-based hydel project in the country is still stuck at the stage of acquiring land and distributing compensation. In recent years, the project has been ping-ponged to Indian and Chinese companies, but its fate is still uncertain.

Another disappointment has been the Melamchi Water Supply Project. The project that remained idle and witnessed a brief controversy as well following the exit of Italian contractor CMC, has witnessed progress of only 8.9 per cent in the first six months of the current fiscal.

Upper Tamakoshi Hydroelectricity Project, Gautam Buddha International Airport (GBIA), Galchhi-Rasuwagadhi Road and Sikta Irrigation Project are the top performers with 66.7 per cent, 50.4 per cent, 40.1 per cent and 33.6 per cent progress.

Likewise, Bheri Babai Diversion Multipurpose Project has met 28 per cent and Mid-Hill Highway 20.4 per cent progress.

 Published in The Rising Nepal daily on 15 February 2020.