Nepal | January 23, 2021

Government drafts law to facilitate swift implementation

• Mega infrastructure projects

Roshan S Nepal
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Kathmandu, November 4

The government has drafted a new law with the aim of facilitating swift implementation of mega infrastructure projects with an investment of more than Rs 25 billion.

The Office of the Prime Minister and Council of Ministers, which has forwarded the draft law to development-related ministries such as the Ministry of Energy and the Ministry of Physical Infrastructure and Transport for their inputs, plans to get the bill tabled in the Parliament by the third week of November.

The draft law, which envisions project implementation under ‘corporate model’, provisions hiring project chief and core management team through fair and open competition.

Under the law, the project chief and core personnel cannot be transferred or removed except for non-performance reasons.

“This provision ensures that no project faces difficulties due to staff transfers,” said OPMCM Secretary Kedar Bahadur Adhikari, adding that remuneration of the project chief and other officials can also be different for different projects and officials may also be hired on contract basis. “This is to facilitate easy recruitment of officials.”

Any individual — private sector executive, retired government officials, retired chief executive officers — can apply for the top and other posts of the project. The line ministry will make all the hiring.

The draft law envisages implementation of projects only after financial assurance and completion of pre-feasibility study. After the assurance of these two components, the Cabinet will authorise the ministries concerned to implement the project under this law.

“This is to ensure that only the projects whose necessary preparations have been completed will go for implementation, unlike the present practice where the majority of the projects are first announced by the annual budget and preparations follow,” said Adhikari.

The draft law also envisages easing the process of land acquisition, and authorises the project chief to finalise land acquisition within six months from the day the negotiation begins. As per the provision, if 75 per cent of the owners of land to be acquired agree to the compensation offered, the rest cannot reject it or file complaints.

Even if some people reject the offer, the government will deposit the ascertained compensation amount in their bank accounts and acquire their land. “Under the law, no project will be stalled just because of land acquisition-related issues,” said Adhikari.

The draft law also envisages prohibiting any activity at the project site that would obstruct implementation. Project chief or the chief district officer concerned would take action against anybody involved in such activity.

The law also provisions priority decisions for projects under it, whereby other agencies concerned would take swift decisions for, say, forest clearance or procurement of construction materials.

Projects being implemented under the law should not follow the Public Procurement Act (except for a few major provisions in the PPA) and the bidding process, depending on pre-determined implementation modality such as Engineering Procurement Construction, and Engineering, Procurement, Construction and Finance.

Technologically complex and high-value projects — in which the government cannot put in required investment and the private sector party does not want to go to the bidding process — can avoid the bidding process and opt for direct negotiation after taking approval from the government. However, projects can go for direct negotiation only after completion of the Detailed Project Report.

“The major thrust of this law is that no project should face difficulties due to issues related to inter-agency coordination,” said Adhikari.

This law, however, will not encompass existing projects, except for those national priority projects that are yet to take off are in the initial phase of construction.


A version of this article appears in print on November 05, 2018 of The Himalayan Times.

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