Nepal | July 05, 2020

New measures to ramp up capex introduced

Himalayan News Service
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Kathmandu, May 29

In view of the slow capital expenditure, the fiscal budget 2017-18 has taken some steps to improve budget implementation.

The District Treasury Controller Offices (DTCOs) have been asked to release budget to the implementation units under the various ministries and departments based on the quadrimester division of the programmes and expenditure that is available in the line ministry budget information system (LMBIS). LMBIS is a web-based system developed by the Ministry of Finance for the line ministries to prepare annual budget and procurement plan. This means that the ministries would not have to take approval from the National Planning Commission to delegate authority to line agencies to spend the budget.

Budget recipient ministries

Source: Fiscal Budget 2017-18

Similarly, the ministries have been directed to mandatorily frame the guidelines/directives, set up the offices and hire staffers for the project within the first month of the fiscal year. Also, if any new regulation is required to run the project, it should be developed within one-and-a-half months from the beginning of the fiscal year.

Ministries and departments would need to disclose the details of the activities of the projects, cost, expected results and responsible staffers within one-and-a-half months from the beginning of fiscal year. Project staffers should be selected based on their experience and performance in project implementation in previous years, according to the fiscal budget.

The project staffers should be provided orientation on the technical aspects of the project, implementation modality, desired outcomes and inter-agency coordination. Frequent transfer of project staffers will also be discouraged while implementing the next fiscal’s budget.

The projects must complete environmental impact assessment and initial environmental examination within the timeframe as provisioned by the given laws. Tender notices must be issued within the first month of the fiscal and tender must be awarded within the first three months of the fiscal, Deputy Prime Minister and Finance Minister Krishna Bahadur Mahara said while presenting the budget. “If the contractor fails to meet the completion deadline as agreed upon when the contract was awarded, the project can annul the contract with that contractor and award it to a fresh contractor.”

A single contractor has been barred from taking more contracts at the same time and hire sub-contractors. The National Vigilance Centre has been assigned to check the quality of the construction works delivered by the contractors and take action against them if any work is found to be of substandard quality.

The contractor shall also be provided financial and non-financial incentives, which is expected to help deliver quality work at the desired timeframe.

The fiscal budget has also provisioned to expedite the payment release to contractors. Payment to the contractors will be released within 15 days from the date in which they submit their bills and 10 days from the date of verification of the works delivered by them, as per the budget.

The fiscal budget for 2017-18 has also envisioned to set up a Public Expenditure Review Commission to eliminate the chances of duplication of projects and for scientific allocation.


A version of this article appears in print on May 30, 2017 of The Himalayan Times.


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