The government is planning to set up a company to lease construction equipment so that contractors engaged in infrastructure projects will not need to buy new machinery each time increasing the construction costs, National Planning Commission (NPC) Vice-Chairman Yubaraj Khatiwada said on Thursday.

Speaking at the parliamentary Finance Committee, Khatiwada said the government had proposed to set up the company under the

public-private partnership model. “After such a company is established, contractors

can hire the necessary construction equipment only when they need them, thus saving money,” he said.

The government has consistently not been able to spend a large portion of the capital expenditure budget. This year too, the government has been able to spend only 20 percent of the capital budget as of April-end. The low spending capacity has been mainly blamed on procedural

problems in the issuance of contracts.

Khatiwada also said that strict laws would be enforced against contractors who abandon their projects right after collecting the 20 percent projects mobilization cost. A number of projects have been left in limbo after the contractors fled midway.

Khatiwada said the government had focused on balanced development through proper allocation of funds for the seven federal provinces in the upcoming budget. According to him, the government will be giving priority to resource mobilization through the coordination of government agencies and the private

sector. Meanwhile, lawmakers have asked the government

to focus on promoting

production businesses, ensuring effective implementation of subsidised loans to

agriculture and increasing the budget for rural infrastructure mainly in the Karnali region.

Member of Parliament Rita Shahi said the government should implement large projects in the Karnali region. She also stressed the need for government action to control smuggling of local herbal products.

Lawmaker Chandra Bhandari said the government should cut the subsidies being provided to the general education system. “Instead, technical skill development programmes and vocational education should be

promoted to address the growing problem of educated unemployment,” he said. Parliamentarians said that creating agriculture markets, providing collateral-free loans to landless farmers, establishing a university in Far Western Nepal, forming a cardamom development board, setting up cooperative offices in all the 75 districts and

completing the postal highway should be accorded priority in the budget for the next fiscal year.

Former Finance Minister Ram Sharan Mahat said the government should reduce recurrent expenditure to increase the share of capital expenses.

“Instead of granting subsidies to all agricultural business, they should be provided to only such businesses that are result oriented,” he said.