| March 21, 2018

Government’s policy and program repeats legal reforms and infra projects

Private sector welcomes PPP model in reconstruction work

KATHMANDU, July 9: The government Wedn-esday announced that it will carry out reconstruction work on infrastructure damaged in the April-25 earthquake in a public private partnership (PPP) model and also encourage the use of domestic technology and raw material for the work.

The private sector has welcomed the idea and plan but also criticized it for failing to come up with substantial policies for the industrial sector -- which has seen a decline -- and the ever widening trade deficit.

Federation of Nepalese Chambers of Commerce and Industries (FNCCI) President Pashupati Murarka said a majority of the programs in the 'Policy and Program for Fiscal Year 2015/16' of the government unveiled by President Ram Baran Yadav on Wednesday were repeated from last year's 'Policy and Program' and implementation was the key.

The announcements of legal reforms for boosting the investment climate and executing different infrastructure projects like of the Second International Airport (SIA) in Nijgadha and the Kathmandu-Tarai Fast Track Expressway were also in the previous policy and program and the same thing has been repeated.

In order to address the recurring problems of low project implementation and spending, the government said it will not allocate any budget for projects without project readiness by completing the Detailed Project Report. The government said that it will implement performance-based incentives for its employees for capacity enhancement of national pride projects and mega infrastructure projects.

The government's priorities are on reconstruction following the April-25 earthquake. Many believe that the government has focused on the reconstruction but failed to present a blueprint for the same, except for a few ideas about setting up of the National Reconstruction Authority.

Financial commitment from the international agencies and donor partners poured in -- to the tune of Rs 440 billion worth, but it is feared that it will take months to prepare projects and there will be slackness in implementation if interventions are not made in this regard.

The government has set the budget ceiling of Rs 841 billion for the next fiscal year, including a budget package of Rs 106 billion. Finance Minister Ram Sharan Mahat will table the budget to translate the policy and program into reality next week.


The government has said it will encourage the merger of cooperatives. Unveiling the policy and program, President Yadav also stated: "Merger of cooperatives of similar nature will be encouraged." The document of policy and program also states that a policy of 'One Family, One Cooperative Member' will be introduced in the next fiscal year.

The government's policy to encourage merger of cooperatives has come at a time when bank and financial institutions on a merger spree.

Cooperatives' leaders have hailed the government's plans to encourage the merger of cooperatives. "Small cooperatives of similar nature cannot afford their expenses. They should pursue mergers -- which the government has promised to encourage. This is a welcome step," Rishi Raj Ghimire, chairperson of Nepal Federation of Savings and Credit Cooperative Unions (NEFSCUN), told Republica.

He also said that the 'One Family, One Cooperative Member' policy will promote the cooperatives sector. "This will help expand cooperatives to every household of the country," he added.

The government has also said that it will equip the Department of Cooperatives with adequate resources for the development of the cooperatives.

Meanwhile, the government also announced that it will make arrangement to safeguard members' savings and loans up to a certain ceiling.

The policies and programs states that such arrangements are needed to minimize the risk that financial cooperatives are facing.

The government will also establish a 'Cooperatives Savings Safety Fund' and 'Cooperatives Loan Investment Safety Fund', according to the 'Policy and Program' document.

Meanwhile, the government said it will provide capital grants to productive cooperatives "with a view of orienting women, the poor, marginalized, landless and people who are economically and socially backward, to their livelihood through cooperative businesses". Likewise, capital grants will be provided to cooperatives that establish and run industries related to fruit-farming, agriculture, animal husbandry, and fishery under a public-cooperatives partnership.

Major programs and projects:

• Starting construction of Budhi Gandaki Hydroelectric Project

• DPR of Nalsingadh Hydropower Project

• Starting Kathmandu-Tarai Fast Track Expressway

• Starting Raxaul Amalekhgunj Petroleum Pipeline

• Continue construction work like postal highway and on major trade routes like Birgunj, Pathalaiya, Kohalpur, Nepalgunj

• Developing transmission line projects in BOOT model

• Unified management and updating of the capacity of hydro projects into optimum level by river basin-wise

• Completing ongoing projects of Sikta, Rani Jamara Kularia and Babai Irrigation

• Bringing Bhairahawa Special Economic Zone (SEZ) into operation

• Starting the development of Panchkhal and Simara SEZs,

• Operating one-door service for domestic and foreign investors

• Reviewing of cash incentive on exports

• Starting a ring road in Pokhara

• Continue work on Bardibas Simara railway

• Implementing suggestions of the High-Level Tax System Review Commission

• Preparation of Land-use plan

• Completing the Melamchi Drinking Water Project by 2016

• Second International Airport

• Continue work on Gautam Buddha Regional International Airport and Pokhara Regional International Airport

• Continue mid-Hill Pushpa Lal Highway

• Distribution of Poor Household Identity Card