FinMin seeks details on development project contracts

KATHMANDNU, January 20: The Ministry of Finance (MoF) today formally asked all ministries to send details on the number of development project contracts handed out so far — a measure aimed at giving impetus to capital spending.

The request was made as the contract signing deadline for implementation of various development projects expired last Wednesday.

“We are sending letters to various ministries today asking them to

provide us details within the next three days,” MoF spokesperson Ram Saran Pudasaini said. “We will be able to know about the status of project implementation only after we get their responses.”

At the beginning of this fiscal year in mid-July, the MoF had asked all ministries to complete the task of signing agreements with project contractors within mid-December so as to beef up capital spending. But after they were unable to complete the task within the stipulated timeframe ‘because of month-long festive season and the Constituent Assembly election’, the MoF had extended deadline by a month to mid-January.

“Although we had asked all ministries to give us an update on status of contract signing by January 15, none has submitted the report,” Pudasaini said. “This is largely because of lack of coordination between various wings of the ministry.”

It is said many ministries do not have updated information on contracts that have been handed out so far as multiple number of departments, divisions and project offices work on it. “Because of the involvement of a number of bodies, the parent body — which is the ministry — usually finds an excuse to say it is not fully aware of works being carried out by a project office located in, say, a far-flung area of the country. This lack of coordination is preventing us from getting information on time,” Pudasaini said.

The MoF has lately been focusing on timely signing of project contracts to ensure projects are implemented on time and capital budget is fully utilised. However, low capital spending so far this fiscal indicates that project implementation process is moving ahead at a slow pace.

In the first six months of the current fiscal to mid-January, the government has utilised only Rs 11.46 billion, or 13.5 per cent, of the Rs 85.10 billion allocated for capital expenditure. Such a result has come during the year when the annual budget was introduced right on time.

Low capital spending hurts development endeavours of the country as most of this money goes towards building various projects, like road networks, power transmission lines, irrigation and hydropower, among others. Low capital spending also affects job creation process, as these projects require large number of human resources.

“We believe ministries are fully aware of what are at stake here, and hope they will help us in giving a boost to capital spending,” Pudasaini mentioned.

(Source: THT)