The billion-rupee gap

  • Inability to spend money earmarked for infrastructure is a loss for the country
The billion-rupee gap

Dec 23, 2014-

On Monday, 13 years after construction first began, a steel truss bridge connecting Toksel in Okhaldhunga district to Lekhani in Udayapur finally came into operation. Hundreds of people gathered on the bridge decorated with bunting—triangular pieces of colourful paper strung across a rope—to mark the occasion. Okhaldhunga and Solukhumbu to its north will now be directly linked to the Capital and the Tarai. Some have, thus, reportedly hailed the bridge as ‘the gateway to the development of the Eastern hills’. Others were more cautious in their assessment, pointing out that unless a few other bridges are completed in the region, people cannot fully benefit. For now, the only thing we can be certain of is that the hope brought about by the 570-tonne bridge reflects the profound hunger for infrastructure throughout the country.

According to a 2013 World Bank study titled ‘Reducing Poverty by Closing South Asia’s Infrastructure Gap’, the average infrastructure investment as percentage of the GDP for the 1973-2009 period was only about five percent for Nepal. Bhutan, on the other hand, spent as much as 15 percent of its GDP on infrastructure. If Nepal is to graduate from the status of a least developed country to a developing one, it will require $13-18 billion investment in infrastructure from 2011 to 2020. While finding the financial resources for development is one aspect of the problem, Nepal, in the immediate, suffers from a different paradox. The country has desperate infrastructure needs but it is still unable to spend resources allocated for the same. For instance, only Rs 10.5 billion (nine percent) of the Rs 116.75 billion earmarked as capital expenditure was spent in the first five months of the current fiscal year.

In addition, only seven percent of Rs 20.98 billion (18 percent of total capital expenditure) allocated for national pride projects in the current fiscal year has been spent so far.

To address this problem, the government must begin by releasing its yearly budget strictly on time. This should be followed by making amends to the cumbersome process of procuring public goods, and also developing guidelines for land acquisition and rehabilitation. In the absence of such guidelines, projects have frequently run into problems with locals and faced obstructions by political parties. Concerning implementation, while the process of issuing tenders and hiring contractors should be made more transparent, engineers, consultants, supervisors, and contractors that do not complete assignments on time must be punished and perhaps even blacklisted. The Commission for Investigation of Abuse of Authority should effectively monitor such projects, as the greater the investment, the higher the chances of irregularities and corruption.


Published: 24-12-2014 09:28

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