Both government and private sector lack capacity, good intention: Adhikari

Nepal aspires to be a middle income country by 2030, but there is a lack of a clear vision to achieve it. The country needs to develop infrastructure such as roads, fibre optics, hydropower, hospitals and bridges, but the progress of some of the national pride project is very discouraging as some of the projects have achieved only 50 per cent progress in 30 years. The government and the private sector both lack capital, capacity, expertise and dedication needed to develop large infrastructure projects.

Against this backdrop, Modnath Dhakal of The Rising Nepal talked to Rabindra Adhikari, who served as chairman of the Development Committee of the erstwhile Legislature-Parliament. The young politician had played a pivotal role in facilitating and lubricating some of the development projects and coordinated with many government and non-government agencies for the same while leading the committee. Excerpts:

Implementation of development projects in Nepal is very sluggish and pathetic. What do you think has led to the slow pace of progress?

Yes, the implementation part of the development projects in our country is very disheartening. While serving as the chairman of a House panel on development, what I observed in the past three and half years was that Nepal has high political instability. A minister is replaced with a new one every six or nine months. Once, a new minister comes to lead the ministry, he changes the secretary and joint secretaries, and the chief of various departments and development projects. This creates a vacuum in terms of responsibility and accountability. The process doesn't end here. Every minister comes up with his/her unique projects and wants to see them go through and keeps on seeking support from the Finance Ministry, the Cabinet and the Prime Minister's Office. So, the major impeding factor for the disturbed development is political instability.

Our ministries and development agencies lack the capacity and good intention so required to carry out the development works in a country like Nepal. Here, I would like to add that political harassment of the bureaucrats has also contributed to the inactive bureaucracy. Although the bureaucracy is the shadow of the government, it lacks creativity, courage and dedication.

Nepal's private sector also is not capable enough to handle large development and infrastructure projects. This is also one of the reasons behind the government's failure in achieving the development goals. The worst part is the poor coordination and cooperation among the ministries and other government agencies. Even the PMO has failed to coordinate with the development ministries. The PMO was not as ineffective as it is today. It has least concern for the development projects. Even the Prime Minister has biases against some projects.

Take the example of the Kathmandu-Narayangarh road. A person arrives in Nepal in 12 hours from Europe, but it takes him more than that to reach Narayangarh from Kathmandu. Why doesn't the government expedite the expansion and upgrading of the Kalanki-Nagdhunga and Mugling-Narayangarh roads? The government should be ashamed of it. The same situation prevails at the Tribhuvan International Airport (TIA). It has been unable to handle the traffic.

What role did the Development Committee play in facilitating the development projects?

The Development Committee tried its best to lubricate the Melamchi Water Supply Project, Pokhara and Bhairahawa Regional International Airports and many other projects. We activated one and a half dozen development projects, including the North-South highways. The DC did not just issue directives, it coordinated with the concerned agencies, motivated them and facilitated the allocation of the required budget. We even reached the grassroots level in some of the projects like the Melamchi. The committee played a crucial role in removing the bottlenecks in development. But still we are not satisfied with the progress.

You said that the private sector in Nepal lacks both capacity and intention to handle development projects. Could you elaborate on it?

The private sector hasn't increased its capacity in the past couple of decades. It just wants to play with the government rules and loopholes and earn money rather than implementing its expertise. The Nepali private sector lacks the required capital, expertise and good intention as well as technical equipment and skilled manpower. It is yet to come up with the corporatised world. The budget of the current fiscal year has allocated about Rs. 350 billion for the development projects, but the private sector doesn't have the capacity to implement the projects worth such a huge amount. At the same time, the government also does not have the capacity to check the standard of the works carried out by the private sector.

A study by the DC itself had found that it took about 13 years on average to complete a development project in Nepal whereas the average period to complete a national pride project is 60 years. What stops a project from completing in time?

We reached that conclusion after studying about 56 large development projects. It's been about two decades since we started talking about the Nijgadh Airport, 40 years of the Pokhara Airport, 20 years of the Melamchi, and about three decades of the Sikta Irrigation Project. We have found that the progress of the national pride projects in the past three decades is about 50 per cent only. Had there been good project preparedness, most of the pride projects would have been completed in 5-7 years period. In my point of view, only the Budhi Gandaki Hydropower Project will take about 7 years, the rest will be completed in five years.

We don't prepare the project in minute detail, change the project heads every now and then, are less sincere to development and agencies lack the commitment to those project. The Investment Board of Nepal, which was established as a one window agency to facilitate large domestic and foreign investment projects, has not got proper support from the line ministries. The ministries behave in a way as if the Board is a rival to them. The ministries are more into engaging the projects than facilitating them. It was unfortunate that some of projects with good work progress, such as the Upper Tamakoshi Hydropower Project and Melamchi, were badly affected by the Gorkha Earthquake 2015.

Don't you think that the government process to prepare the projects and tendering is time consuming?

Yes, the government process very slow. It also lacks the expertise needed to prepare projects. But I have observed that the projects supported by foreign assistance get more delayed due to the prolonged process. Development partners like the Asian Development Bank and the World Bank take about four years to complete the process before it goes on the floor. China and India have the same tendency. They announce multiple time that so and so project will be supported by them, inaugurate it more than one time or sometimes at multiple locations and try to promote themselves in the media and build up their own image. However, the situation has changed recently as the media, civil society, parliament and other stakeholders have begun to question the relevant authorities if there are delays and any misappropriation.

The government has awarded the Kathmandu-Terai Fast Track Highway to the Nepal Army. Nepal doesn't have any model for the construction of such a mega project. Do you think the Nepal Army has the expertise and capacity to develop such a large scale strategic project?

I don't know how the army is going to develop it. The government might have discussed the matter in detail with the army. But we are clear that the project should not have fallen within the domain of the army. It's an exception. The Department of Roads is silent in this regard. Recently, the government has decided to buy the Detail Project Report (DPR) of the Kathmandu-Terai Fast Track from the Indian company IL&FS. I only hope that it was done with good intention and assure you that the army has our full support in the project. The Nepal Army has a challenge to maintain its reputation as it has put its stake in the project.

The denizens of the Kathmandu Valley are cursed to live with the dust and pollution. The roads have been dug multiple times in the past couple of years. There were telephone wires and drinking water pipes in the past, then the road expansion and now the Melamchi. Why don't the concerned development agencies do it in a coordinated way?

I already told you about the poor inter-ministerial coordination. The National Planning Commission has no interest in resolving such issues. Its role has been limited to approving the projects. The PMO is ineffective. It should have played a role in forging coordination and collaboration in the development works. We had suggested the government lay the optic fibre at the same time while laying the pipes for the Melamchi Water Supply Project. But no one paid attention to our suggestion. The DC played a more coordinating role than the PMO in the past years.

Why are foreign investors less attracted to infrastructure projects other than hydropower?

We are not serious about Foreign Direct Investment (FDI). Holding seminars and urging the foreign investors is not enough to attract investment. We don't have an environment that pulls in FDI. We still lack FDI-friendly laws. I have just said that the Investment Board is not getting proper support from the ministries. We have a very discouraging situation in terms of foreign investment.

We need to overhaul the legal provision and change our narrow thinking. A sincere private sector is another prerequisite for the FDI.

Do you see any prospect of Public-Private-Partnership (PPP) in Nepal?

Not only the PPP but every model of development also has been ineffective here. The BOOT (Built Own Operate Transfer) model has also failed. When the parties of any pact do not perform their duties as inscribed, no model of development will be effective.

Can the local government play a role in facilitating development?

Of course. They are the ones that will benefit the most from a development project in their locality. After the locals started paying attention, the construction works at the Jomsom-Korala road began moving ahead at significant speed. The same is with the Pokhara Airport and Kali Gandaki Corridor. 

Published in The Rising Nepal, Oct. 16, 2017.