Nepal | July 04, 2020

EDITORIAL: A futile move

The Himalayan Times
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The govt move to form the NICC is another futile exercise at turning the clock back as it will give birth to institutional corruption

The government is repeating the same mistake it made some 58 years ago when it set up the National Construction Company Nepal (NCCN). The government has now established yet another construction company – Nepal Infrastructure Construction Company (NICC) – to build government projects. NICC was recently registered with the Office of the Company Registrar with an authorised capital of Rs 10 billion and issued capital worth Rs 3 billion. It will function as an independent company, just like the NCCN. The government’s claim is that with the establishment of the NICC, the private construction sector will become more efficient and accountable, and this will ultimately accelerate development works as per the government targets. The government has said the NICC, which will come under the jurisdiction of the Ministry of Physical Infrastructure and Transport (MoPIT), will mainly engage in the construction of tunnels and large-size  national pride projects that require huge amounts of money and expertise. Besides the MoPIT, the Ministry of Finance, Ministry of Energy, Water Resources and Irrigation and Ministry of Urban Development are its institutional shareholders, with 7.5 million shares in total.

Rajeshwor Gyawali, spokesperson of theMoPIT, says the company has been given executive rights to execute major construction works to be built with government funding. The NICC will construct highways, airports, dry ports, canals, pipelines, substations and transmission lines, among others. It will also carry out pre-feasibility, feasibility, investigation, design, management, detailed project reports and environment impact assessments of projects. Gyawali claims that NICC has not been established to minimise the role of the private sector, but to focus on completing mega projects on time. The company will have seven directors in the board, represented by the concerned ministries, and it will take major decisions related to construction works. The company is yet to open its office.

Needless to say, there isn’t a single government project that has been completed on time. Delay in works has not only resulted in cost overruns, but has also led to compromise in the quality of work. All government works are built by the private sector on a contract basis, but their quality are substandard due to the government agencies’ poor monitoring and laxity in implementing the rules and regulations. So there is no guarantee that the NICC will be able to perform well given its bureaucratic structure. The company is doomed, just like the NCCN, which folded up in 2010 for failing to live up to its objectives when it was formed way back in 1961 with Israeli government assistance. The private sector is sceptical  about its ability to build big projects and has said it can be “a tool for yet another institutional corruption”. It might bag big contracts from the government and ultimately give them to the private sector as petty contracts to finish the jobs. NICC will take years to acquire technical know-how and management skills to develop as a fully functional institution. The government should learn lessons from the NCCN of how it miserably failed to survive over time. This will be yet another futile exercise at turning the clock back.

Migrants’ initiatives

The government’s decision to recognise and felicitate returnee migrant workers for their entrepreneurial initiatives should help promote entrepreneurship among those returning from foreign employment. The government has awarded the best migrant entrepreneurs with cash prizes of Rs. 100,000 and 50,000. Their enterprises were selected based on use of local resources, investment amount, tax compliance, employment creation and energy use.

Millions of young Nepali workers are today working in a host of countries, mostly in the Gulf countries, Malaysia and South Korea. Despite the many hardships they face while working abroad, the migrant workers learn a lot of things there, namely, the local language, way of life and, of course, work skills. Quite a few returnee migrant workers have already put their money, skills and knowledge to start profitable ventures, especially in the agro-sector, serving as a source of inspiration to neighbours and others. The country holds myriad opportunities for entrepreneurship, and it is the duty of the government to help the returning migrant workers channel their money and skills into the productive sector.

A version of this article appears in print on July 16, 2019 of The Himalayan Times.

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