Nepal | June 05, 2020

Cost overrun of NPPs surges by Rs 283 billion: NPC report

Himalayan News Service
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Kathmandu, February 12

The cost overrun of national pride projects (NPPs) has surged by Rs 283 billion due to perennial delays.

According to a recent study of National Planning Commission (NPC), the government would have been able to save Rs 283 billion if the 22 projects that have been classified as NPPs were completed on time.

As the completion deadline of the projects has been extended time and time again citing various reasons, the country has lost more than Rs 300 billion in terms of expected output, as per the report.

Moreover, the progress of NPPs was only lukewarm in the first half (mid-July to mid-January) of this fiscal year.

Project cost

Name Initial estimate Revised
Babai Irrigation 2.87 1.89
Bheri-Babai Diversion 16.43 33.19
Budhigandaki Hydro 260 260
Kathmandu-Tarai Fast Track 111 213.95
Gautam Buddha Intl Airport 29.21 49.29
Hydro Transmission Line 70 70
Kaligandaki Corridor 28.8 28.8
Karnali Corridor 4.1 11.1
Koshi Corridor 5.79 16.2
Lumbini Area Development 5.55 6.1
Melamchi Drinking Water 24 35.54
Mid Hill Highway 33.36 84.33
Nijgadh Intl Airport 700 700
Pashupati Area Development 2.1 2.1
Pokhara Intl Airport 22.1 22.1
Postal Highway 47.24 65.2
President Chure Conservation 1.25 8.55
Rail and Metro Rail Development 70.61 70.61
Rani Jamara Irrigation 12.37 27.7
Sikta Irrigation 12.8 25.2
Upper Tamakoshi Hydro 35.29 49.29
West Seti Hydro 148.7 148.7
Amount in Rs bn; Source: NPC

According to the NPC, the total cost of the 22 NPPs has now reached Rs 1,927 billion against the initial projected cost of Rs 1,644 billion.

The commission has calculated the total cost of the projects based on their master plans. However, as the master plans of some of projects have not been approved yet, the planning body said that the cost calculation was based on the detailed feasibility study report of such projects.

As per NPC, the average cost per project has surged by Rs 12.90 billion. While the average cost of the 22 pride projects was Rs 74.7 billion, the cost has now risen to Rs 87.6 billion.

Among the NPPs, the cost overrun of Kathmandu-Tarai Fast Track is highest at Rs 102.9 billion. The government has assigned Nepali Army (NA) to complete the project. However, NA is yet to provide a justified reason for raising the construction cost of the project.

Meanwhile, Prime Minister KP Sharma Oli, on Monday, expressed concerns over the failure of different layers of governments in expediting development works as expected. Addressing the 47th meeting of the National Development Action Committee at the NPC, PM Oli expressed his frustration over unsatisfactory progress in project implementation, capital expenditure and delays facing various foreign-aid development projects.

At the programme, Oli also directed all the concerned stakeholders to expedite the development works by increasing expenditure. “We must carry out effective coordination between all layers of the government and its agencies to accelerate the pace of development projects,” he had said.

A version of this article appears in print on February 13, 2020 of The Himalayan Times.

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