Money

‘Rs2.22t’ needed to address infra gap

- Post Report, Kathmandu
National Urban Development Strategy 2015 aims to make an annual investment of 2 percent of the gross domestic product

Aug 31, 2015- Nepal requires an investment of Rs2.22 trillion by 2031 to adders the existing infrastructure deficit and additional demands of 191 municipalities, a government strategy paper has said.
The National Urban Development Strategy 2015 has stated the country requires huge investment for balanced and regional urban system as the strategy aims to make annual investment of 2 percent of the gross domestic product (GDP) for the purpose.
Currently, the annual investment stands at just Rs20 billion, 1 percent of the GDP.
As per the Urban Infrastructure condition Index of 58 municipalities, prepared to assess the infrastructure status of various municipalities, the investment deficit stood at Rs372 billion.
The deficit has been calculated based on existing and desirable state of municipalities.
Economist Keshav Acharya said generating necessary resources as per the strategy within 15 years would be challenging. “If there is a clear vision and implementation plan, generating big resources won’t be a problem, but the municipalities have been confined to approving designs of houses,” he said.
According to the strategy, the biggest investment is expected to come from the government and the donors. They are expected to contribute 60 percent, followed by municipalities (19 percent), private sector (10 percent) and community (6 percent).  
The 15-year strategy aims at providing cent percent access to piped water and sewages in all urban core areas, total electrification in all urban areas with 80 percent household with alternative sources, 80 percent paved roads in existing municipalities, 50 percent new residential housing through land readjustment and 100 percent solid waste collection.
It also aims at offering high speed internet availability, 2.5 percent of open space at ward-level in all old municipalities and 5 percent for new and 70 percent contribution of the urban areas to the GDP.
Acharya said the government should focus on newly-urbanising sectors for planned urbanisation where the cost of urbanisation will be lower compared to older urban centres where thick settlements make it difficult to implement the plan.
“There is also increased need for planned urbanisation in hilly areas where settlements are scattered and managing infrastructure there is costly and challenging,” said Thapa.
The budget for this fiscal year has focused on expanding urban infrastructure in major Tarai based cities including Biratnagar, Janakpur, Birgunj, Bhairahawa, Nepalgunj and Dhangadi. “Targeting these cities, construction of six-lane trade road is under way,” states the budget.
The government has also introduced the idea of building two smart cities, in Kathmandu and Nijgadh, with all necessary infrastructure.
The strategy says increased investment in the urban sector would be justified because of the sector’s contribution to production and living standards of the people.
According to the Central Bureau of Statistics (CBS), urban areas directly contributed 33 percent to the GDP, while another 30 percent is contributed by surrounding villages. “Investment in urban infrastructure facilitates wealth generation and generates employment while boosting economic growth,” it says.

Published: 31-08-2015 10:06

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