MoF misses deadline of key project, seeks term extension
KATHMANDU, Aug 28:
Ministry of Finance (MoF) has proposed to Asian Development Bank to extend deadline of Capital Market and Infrastructure Capacity Support Project (CMICSP) by 20 months.
The project, which started in February 2013, was expected to complete by November. The agreement to implement the project was signed in June 2011. The project's term was extended by a year right after the signing ceremony because of the delay in selection of consultant.
The project of US$ 6.25 million is said to be key in drawing investment for mega infrastructure projects and lay ground for spurring economic growth by promoting development works through public private partnership (PPP) model.
The major component of the project is to address key impediments to infrastructure development in the country by creating enabling environment for the generation of long-term financing and active private sector participation. But red tape and conventional working culture of bureaucracy has affected the project works.
Endorsing Public Private Partnership Policy as well as essential laws for PPP and establishing a PPP center at National Planning Commission (NPC) to facilitate private sector as well as institute a separate division at MoF to manage all public debt from the single door were the other components of the project.
MoF has prepared PPP policy and is in the process of tabling it in the cabinet. But work on revising Private Financing in Build Operate of Infrastructure, 2007 is at very early stage. Similarly, the process of procuring Information Technology (IT) services for Debt Management Division is yet to start.
Minister for Finance Ram Sharan Mahat often criticize other ministries for lacking project execution capacity. This time his ministry is at the receiving end.
Inability to spend taxpayers' money and pay development dividends to the taxpayers is a key problem of the public sector.
Commenting on delay in implementation of CMICSP, former finance secretary Krishna Hari Baskota said the finance ministry has lost moral high ground to dictate other ministries to expedite spending.
As many as three joint secretaries, who head the Economic Policy Analysis Division at MoF - which implements CMICSP, has been transferred since the signing of project agreement. Frequent transfer of key employees and delay in decision-making are the major reasons behind delay in implementation of CMICSP, a source privy to project implementation said.
About a quarter of budget earmarked for developmental works remains unspent every fiscal year. It is mainly because of the failure to complete projects in time.
Budget worth Rs 39 billion remained unspent last year, according to finance ministry officials.
Private sector has been lobbying for clear policies and efficient and functional system in public offices for the last many years. Hari Bhakta Sharma, senior vice president of Confederation of Nepalese Industries, said the PPP policy and laws are important for addressing infrastructure bottlenecks" "However, execution of key projects have been affected by slow pace of bureaucrac"," Sharma said.
Meanwhile, Surya Prasad Acharya, chief of Economic Policy Division has expressed commitment to complete all tasks, except procurement of IT services for Debt Management Division, within six months" "The Detailed Project Report (DPR) of proposed multipurpose hall in Butwal will be ready by December. We will then hand over the project to private sector through open biddin"," he said, adding" "Private sector will develop the project on build, own, operate and transfer (BOOT) mode"."
CMICSP also plans to institute PPP units in all development-related ministries.
Finance Secretary Suman Prasad Sharma said CMISCP should not be taken as development of physical infrastructures only" "It takes time to hold broader consultation with line ministries as well as stakeholders to make policies and laws more accepte"," he added.
Deloitte India has been assigned to study and prepare PPP framework as well as suggest needful measures to create environment for PPP in Nepal and develop effective bond market. The firm has also expressed dissatisfaction over delay in project execution. It is against extending project deadline by more than six months, added the source.
Source: Republica
