Inadequate prep blamed for poor capital spending

- POST REPORT, Kathmandu
Inadequate prep blamed for poor capital spending

Mar 10, 2015-

Capital expenditure has remained consistently poor in recent years because development projects have been selected without adequate preparation, government officials and parliamentarians said Tuesday.

They also blamed the large number of oversight agencies demanding answers from the officials concerned which has brought down morale and led to their losing interest in implementing the project.

As of March 9, capital expenditure has reached 20 percent, according to the Financial Comptroller General Office (FCGO).

Speaking at an interaction organised by the Society of Economic Journalists Nepal, Rabindra Adhikari, chairman of the parliamentary Development Committee said that work could not progress at most of the development projects as the budget had been allocated before they were ready for implementation.

“The government selects projects under pressure from different quarters without conducting feasibility studies, and work cannot be done leading to the budget funds remaining unspent,” he said. “A tradition should be set where only projects whose preparatory work has been completed by 80-90 percent are allocated a budget.”

Adhikari also blamed the poor capacity of the contractors and consultants, lack of coordination among government agencies, lack of experts with the National Planning Commission (NPC) and bidding for multiple projects by a single contractor simultaneously for the poor capital spending.

He added that the government should also maintain a rule that a contractor should not be awarded a second contract until at least 80 percent of the first contract is completed.

Government officials said that a large number of government and oversight agencies involved in monitoring projects had also hampered the progress of development projects.

They complained that projects should not be subjected to scrutiny by varied ministries, donor agencies, the Prime Minister’s Office, parliamentary committees, Commission for the Investigation of Abuse of Authority, Auditor General Office and District Treasury Office, among others.

The officials also said that the current Public Procurement Act was a hindrance as it only permitted contacts to be awarded to the lowest bidder. As a result, there has been a tradition of quoting rock bottom prices just to get the contract and then abandoning the project midway.

Although the act has provisioned that contracts should not be awarded to a firm lacking technical expertise despite being the lowest bidder, government officials fear to take the risk of not giving the contract to the lowest bidder.

Tanka Mani Sharma, secretary at the Public Procurement Monitoring Office, said that although the Public Procurement Act had some weaknesses, it did not pose the biggest problem.  

“Political influence while selecting projects, lack of regular follow-up of project implementation, poor participation of users and collusion between contractors and government officials have also affected development expenditure,” he added.

Similarly, secretary of the Physical Planning Ministry Tulsi Prasad Sitaula said government officials feared oversight agencies and could not make quick decisions. “Besides low bidding, failure to take action against under-performing contractors, mismatch in determining priority projects and lack of monitoring have also aggravated the problem,” said Sitaula.

Acknowledging that errors occurred mostly during the project selection stage, NPC member Chandra Mani Adhikari said the government had started doing homework in implementing scientific methodology while selecting projects. “We have been effortful to select only demand-driven projects as opposed to supply-based projects, which is the ongoing practice at present,” he said.

Published: 11-03-2015 06:46

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