Kathmandu, January 17

Owing to concerns about slow capital expenditure, the Ministry of Finance has prepared an action plan for ministries and line agencies responsible for executing the projects. The action plan, which will be unveiled by Deputy Prime Minister and Finance Minister Krishna Bahadur Mahara tomorrow, lays emphasis on strict monitoring of big ticket projects in a bid to accelerate their construction work.

The finance ministry has envisaged utilising at least 80 per cent of the budget allocated for capital expenditure, which is required to achieve the target of higher economic growth. The government has set a target of achieving growth of 6.5 per cent this fiscal by accelerating development work, as there has been good progress in agriculture sector and wholesale/retail trade (consumption sector).

“This is why the government wants to give a big push to accelerate development and post-earthquake reconstruction work to stimulate the struggling economy,” Mahara told The Himalayan Times.

The woeful progress regarding capital expenditure in the first half of this fiscal has disappointed the government, according to Mahara. “Merely 11.3 per cent of the total development budget of Rs 311.95 billion has been spent, which shows lack of preparation of projects regarding tender documents and other procedural work.”

The MoF has asked the Monitoring and Evaluation Division under the ministry to regularly monitor the progress of projects that have been authorised to mobilise Rs 1 billion and more. It has asked all the ministries and their line agencies to conclude the tender process and award contracts within the fifth month of this fiscal, but many big ticket projects are yet to conclude the contract awarding process.

Major highlights

• Utilisation of at least 80pc of the budget allocated for capital expenditure
• Ministries and line agencies to cancel contracts of contractors that have been slow in implementing projects
• Such contractors to be blacklisted and deemed ineligible to bid for government tenders again
• Main contractor required to take consent from project chief before appointing any sub-contractors
• Budget Division of MoF to filter projects based on readiness for implementation before allocating budget from the next fiscal
• Concerned ministries to be asked to form special purpose vehicle for some crucial projects
• Job creation for 450,000 every year through development works