Govt decides to pay Rs. 8.1 billion to contractors

Builders demand for additional Rs. 40 billion

 

Kathmandu, Jan. 14

Amidst the discouraging performance of the development budget, the government decided on Sunday to immediately clear the remaining payments of the public infrastructure construction to the contractors. It has announced that the clearing of the dues would begin with Rs. 1.71 billion government liability from the last Fiscal Year 2022/23 and Rs. 6.30 billion of this year.

The government could spend only 15.52 per cent of the total capital allocation for the current fiscal year. By Saturday, it mobilised Rs. 46.88 billion of the total development budget Rs. 302.07 billion, according to the statistics of the Financial Comptroller General Office (FCGO).

A meeting called by Prime Minister Pushpa Kamal Dahal 'Prachanda' and attended by Minister for Finance, Dr. Prakash Sharan Mahat, Minister for Physical Planning and Transport, Prakash Jwala, Chief Secretary, Dr. Baikuntha Aryal, Finance Secretary Dr. Krishna Hari Pushkar, Secretary of the Ministry of Physical Infrastructure and Transport, Keshav Kumar Sharma, Director General of the Department Road, Sushil Babu Dhakal at the Prime Minister's Office decided to proceed with the payment process on Sunday.

Meanwhile, PM Prachanda directed the Ministry of Finance (MoF) to speed up the development works by disbursing Rs. 8.1 billion immediately.

With this decision, the government has expected that development and construction work will accelerate and the economy will become more dynamic.

However, the Federation of Contractors Associations of Nepal (FCAN) said that the amount government announced to pay soon was of the dues from the last fiscal while the contractors are asking the government to facilitate the remaining payment of Rs. 40 billion which is pending.

Contrary to the government's claim, President of FCAN, Rabi Singh, said that Rs. 6.30 billion was not the liability crated for the government in the current fiscal year but it was the amount from the bills submitted to the government in the last fiscal and the budget was allocated this year.

He said that the contractors couldn't meet the 30 per cent milestone set by the government for the last fiscal year (ending mid-July) due to the ban on crusher industries and elections. "Therefore, we had asked the concerned ministries and Prime Minister for the extension of the deadline. The government has expressed its consent to the potential extension but it couldn't be implemented," said Singh.

According to the builders, they have been demanding for time extension of at least six months to one year. They had held discussions with PM Prachanda regarding it.

Singh said that the ministries couldn't implement the decision of the government fearing that it would attract the attention of the Commission for the Investigation of Abuse of Authority (CIAA). The FCAN has suggested them either to implement the decision or correct it so that there would be no abuse of authority.

The delay in the construction of public infrastructure has troubled both the contractors and public, said Singh.

If all the dues are cleared including those claimed by the contractors, performance of capital budget would reach 30 per cent.

 Published in The Rising Nepal daily on 15 January 2024.