KATHMANDU: The Construction Entrepreneurs’ Fund (CEF), set up 16 years ago to assist in the capacity building of contractors, is witnessing low contribution each year.
Although Construction Business Regulation 2000 makes it mandatory for construction entrepreneurs to pay 0.10 per cent of the accepted contract price to the fund, neither government agencies nor contractors have been fully abiding by the law.
As per a provision in the Construction Business Act 1999, contractors involved in public construction works have to contribute to the fund, which is to be utilised to enhance the quality of construction works by assisting contractors in capacity building.
The infrastructure sector receives a huge chunk of the annual budget. However, due to negligence on the part of public agencies awarding contracts, the sum for the fund is not deducted, Besides, contractors are also unwilling to pay. CEF has thus been receiving contributions from hardly around 25 per cent of contractors each year.
The Ministry of Physical Infrastructure and Transport (MoPIT), that manages CEF, revealed that a majority of agencies have not been contributing. Similarly, many government agencies that award contracts for different projects related to infrastructure development are yet to start deducting the sum for the fund in accordance with the law.
“Only Nepali Army, Nepal Police, Armed Police Force and a handful of other government agencies like Department of Roads are making contributions,” said Tulasi Gautam, under-secretary at MoPIT.
Currently, CEF has a fund of around Rs 75 million. The government had allocated Rs 116 billion to the infrastructure sector for the current fiscal. If proper contributions had been made, the fund would have received Rs 116 million this year alone.
Gautam said even though there was low capital expenditure, the fund should have received Rs 50 million this year. With just a few weeks remaining before the current fiscal year ends, the fund has so far received only Rs 26 million.
MoPIT recently issued a public notice calling on contractors and all government agencies to contribute to the fund. The Federation of Contractors Association of Nepal (FCAN) said not all contractors are paying and government agencies have also not followed the set rules of the fund.
“The Office of Auditor General should treat projects that do not contribute as being ‘in arrears’,” said Ram Sharan Deuja, secretary general of FCAN. He added that besides making it mandatory for foreign contractors, the government should also contribute to the fund as the related Act mentions government contribution too. Each year, FCAN readies the budget to utilise the fund and such plans need approval of the Construction Business Development Council and Execution Committee headed by the minister at MoPIT.
Deuja said getting the budget had been a hectic task each year. “The budget for the current fiscal was approved in the ninth month. In such a situation, it is difficult to effectively build capacity,” he added.
Of late, FCAN is also working on a plan to train in the 14 districts that were affected by the earthquake with the aim of producing quality construction workers.