Implementation of NPB will ensure only properly studied projects are included in the budget
National Planning Commission (NPC) — the apex body that plans and sets country’s development vision — is preparing to implement the National Project Bank (NPB) from the upcoming fiscal year. Implementation of NPB intends to discourage pork barrel projects in the budget, which has not only led to retarded capital spending but has also affected overall development pace of the country. As of now, NPC has been collecting details of projects — both new and ongoing — to be incorporated in the NPB. Against this backdrop, Sujan Dhungana of The Himalayan Times caught up with Sushil Bhatta, member at NPC, to know details of the NPB, its implementation and other issues. Excerpts:
NPC is preparing to start guiding the upcoming fiscal budget through the NPB. Where has the process reached?
NPB is a roster of properly studied and feasible projects. The Financial Procedure and Fiscal Accountability Act, 2019 has delegated the authority to NPC for assessment, pre-evaluation (appraisal) and examination of the projects and programmes and their concurrence for execution at the federal level through establishment of the NPB on the basis of various analytical approaches, including cost-benefit analysis. The NPC has already taken initiatives to establish and institutionalise NPB at NPC. As a preliminary initiative, general guidelines for project identification, appraisal, and selection and prioritisation have been developed. Similarly, an IT-based National Project Bank Management Information System (NPB- MIS) Platform has been established for smooth functioning of NPB. Strengthening and scaling up of NPB and NPBMIS as per the approved implementation action plan will be taken up this fiscal year to address the needs of a fully functional NPB.
Could you elaborate on the process of incorporating projects in NPB?
The guideline states that projects to be incorporated in the project bank will have to pass three different stages — project identification, project appraisal and project selection and prioritisation. The project identification process involves five steps — idea generation, strategic fit assessment, preferred option selection, pre-feasibility study and project concept note. Similarly, the line ministries are required to conduct feasibility study and/or detailed project report (DPR) for establishing project viability, which is done through the project appraisal process. The third stage that a project must pass to be incorporated in the project bank is the project selection and prioritisation, which looks into allocation efficiency in development plans. NPC will form a team that will check the technical and viability aspects of projects. Though we have prepared a general guideline for project identification, appraisal, and selection and prioritisation for NPB, we also need sectoral guidelines to implement the NPB in full fledged manner, which will be introduced soon. As per the NPB guideline, we will reprioritise ongoing projects while new projects will have to clear the aforementioned stages. We will reprioritise ongoing projects by gauging two factors — its priority and implementation status. The NPB concept is based on the principle that project implementation should be result-oriented. NPC has asked all ministries to submit the details of ongoing projects and new projects to be incorporated in the budget for the upcoming fiscal within February 27. We will conduct screening of all these projects and incorporate them in NPB based on the set standards.
So, the upcoming budget will incorporate only those projects that are authenticated by NPB?
We are preparing to make NPB functional from the upcoming fiscal year. The capital allocation in the budget is around Rs 500 million. If we are able to separate 80 per cent of this resource with the result-based framework in the upcoming fiscal year, that will be a big achievement. The implementation of NPB intends to discourage the trend of incorporating infeasible projects in the budget. With the implementation of NPB, we expect new projects will not prop up as it used to in the past. Thus, the focus will be on ongoing projects and their reprioritisation. Budget allocations for ongoing projects which have not fulfilled standards of NPB will be stopped.
Amid concerns that the basket of projects in Nepal is small, will implementation of NPB not constrict availability of projects?
It is unlikely. Donor agencies will have engagement basically in bigger projects. The number of mega projects will be handful and they will certainly have fulfilled basic standards. There are many comparatively smaller projects which are neither feasible nor bankable. The NPB will, in fact, help expand the basket of well prepared and feasible projects. We have introduced different periodic plans, and its execution requires a strong base. By making projects feasible and focusing on their development, the NPB will help create a strong foundation for achieving goals of the periodic and long-term plans. As of today, the elected representatives push for different projects in their constituencies through the budget which are not feasible. This trend should not prevail.
Implementation of the NPB intends to discourage pork barrel projects in the budget. Despite this, it is said the pressure that the Ministry of Finance had been facing to incorporate such projects in the budget has been shifted to NPC. How true is it?
We should be aware that the different policies to regulate projects, including those related to NPB were prepared by lawmakers themselves. So, the new rule regarding project incorporation in the budget should be complied by all. Bringing in infeasible projects and incorporating them in the budget is against the development and all stakeholders of developments should understand it. Line ministries and lawmakers should focus on implementation of ongoing projects rather than bringing in infeasible projects.
As NPC is also governing different national pride projects, how satisfied are you with the progress achieved so far in these projects?
Multiple factors guide the development of projects. We do not have quality standards for different infrastructure projects to be built by provincial and federal government. Firstly, standards of infrastructure should be set. We do not know the thickness of our highways and its load bearing capacity. This should not be the case. The government should develop quality assurance framework of infrastructure. While some projects have witnessed commendable progress, the progress of others is not satisfactory. In a bid to ensure effective execution of a project, every stakeholder should be made accountable. Moreover, if resources are allocated to a project without carrying out the necessary preliminary studies, , its execution will automatically be delayed. The project should make the contractor and consultants responsible and accountable. A project with capable manager and responsible contractor will not have any problem and will be completed on time. Artificial disturbance in any project should be discouraged and penalised. Meanwhile, some projects witness delay due to unforeseen situations. A project should stick to its completion deadline and should work based on a concrete development timeline.
Last year, NPC finalised the approach paper of 15th five-year plan with ambitious economic growth and development goals. How realistic is the plan based on current pace of economic growth and development?
I believe that everything we are doing today is to create a strong base for future growth and development. The implementation of NPB also intends to encourage feasible projects and their timely completion. Once the focus is centred on feasible projects, the pace of development will be accelerated, which will help the government achieve different goals set in the periodic as well as long-term plans.