Government Prepares ‘Sunset Law’ to Fast-Track Development Projects

The government has prepared a preliminary draft of a proposed ‘Sunset Law’ aimed at accelerating infrastructure development projects by addressing long-standing legal and procedural hurdles that have delayed project implementation. A committee formed to study the issue and recommend reforms has reviewed provisions in various laws, including the Forest Act, Environment Protection Act, Land Acquisition Act, and Public Procurement Act, and proposed amendments to facilitate timely execution of development projects.

Committee Coordinator and National Planning Commission Member Arjun Jung Thapa said the draft seeks to eliminate procedural complexities that have caused major infrastructure projects to remain stalled for years despite securing necessary approvals. Speaking at a programme organised by News Agency Nepal, Thapa said the proposed law focuses not only on legal reforms but also on resolving practical challenges and vested interests that emerge during project implementation.

Citing the expansion of the Prithvi Highway as an example, Thapa noted that the project, initiated in 2018, faced delays after local authorities demanded a fresh Initial Environmental Examination  despite an approved Environmental Impact Assessment  and clear identification of construction material sources. Under the proposed arrangement, projects with approved EIAs that already specify the source and quantity of construction materials will no longer be required to conduct a separate IEE for the same purpose.

The draft also seeks to shorten lengthy procedures related to forest land use and tree felling. Concerned agencies would be required to make decisions within three months. If no decision is made within the stipulated timeframe, a steering committee chaired by the Prime Minister would be empowered to take necessary decisions and move the process forward. The provision is expected to apply particularly to projects designated as transformational projects by the government, as well as hydropower and other infrastructure projects located within national parks and conservation areas. The draft further proposes action against officials who fail to make decisions within the prescribed period.

In addition, amendment proposals have been recommended for the Guthi Act, Electricity Act, Land Acquisition Act, and Public Procurement Act. The draft aims to simplify procurement procedures for essential project-related works, such as the relocation of electricity transmission lines during road expansion projects. The committee plans to submit the preliminary draft to the government this week. Following consultations with the Ministries of Finance, Law, Forests, Energy, and Physical Infrastructure, and approval by the Council of Ministers, the bill is expected to be tabled in Parliament.

The proposed framework also addresses issues related to royalties on construction materials. Under the draft, stones, gravel, and sand excavated during foundation digging or road cutting and used within the same project would be exempt from royalty payments. However, royalties would continue to apply if such materials are transported elsewhere for sale or use.

Thapa said the proposal is based on the principle of promoting the “rule of law” rather than merely adhering to “rule by law,” stressing that the objective is not to weaken legal safeguards but to remove impractical and duplicative procedures that hinder development. Former Secretary Keshav Kumar Sharma, speaking at the same programme, said a comprehensive legal reform framework could significantly reduce obstacles in infrastructure development and minimise disputes that often reach the courts.

He added that if the proposed reforms are implemented within the first quarter of the current fiscal year, they could contribute substantially to improving capital expenditure and accelerating project execution across the country. Sharma also clarified that demands from construction entrepreneurs regarding price adjustment should not be interpreted as requests for additional benefits. Rather, they reflect the need to adjust contract values in line with fluctuations in market prices, a provision that can already be addressed within the existing legal framework.