The government has sought to discourage the use of consumer committees to implement projects chosen by lawmakers after discovering widespread irregularities.

A working procedure endorsed by the latest Cabinet meeting stated that consumer committees should not be used to implement major projects under the Local Infrastructure Development Programme.

This programme, previously run under two separate headings, Constituency Infrastructure Special Programme and the Constituency Development Programme, has remained controversial since its inception in the early 1990s because of reports about massive misuse of funds.

“We received complaints that consumer committees have been using contractors to implement the projects instead of doing the works themselves,” said Yadav Prasad Koirala, secretary at the Ministry of Federal Affairs and General Administration. “The committees have appointed contractors through collusion in such a way that the contractors would get the job and the consumer committees would get commissions.”

According to Koirala, considering the number of complaints about the programme, the ministry had proposed reducing the role of the consumer committees.

Although the Public Procurement Act has allowed government entities to award contracts up to Rs10 million, the newly endorsed working procedure on Local Infrastructure Development Programme has barred the use of consumers committees for projects above Rs5 million.

“At least half of the total Rs60 million allocated to each constituency should be used in projects that cost over Rs5 million, as per the approved working procedure,” said Koirala. “In these projects, consumer committees cannot be used and the contract should be awarded by calling tenders.”

According to Koirala, even in smaller projects, the use of consumer committees should be avoided as far as possible. The remaining projects should have the cost ranging from Rs1 million to Rs5 million, according to the new rules.

Some lawmakers, meanwhile, have claimed that consumer committees perform better than contractors. Gauri Shankar Chaudhary, a lawmaker from Kailali-3, told the Post that the fund allocated for his constituency under the programme was mostly being used through consumer committees with notable progress.

“In the consumer committee-implemented projects, people contribute their labour for which the government is not required to pay them. So, the projects handled by consumer committees have been better,” Chaudhary, who is a lawmaker from the ruling Nepal Communist Party, said.

The federal government has allocated Rs 60 million—50 percent up from last fiscal year—for each constituency this fiscal year. The federal government has allocated a total of Rs9.9 billion under the programme.

Due to strong pressure from lawmakers, the government has been increasing the fund under the programme almost every year. Lawmakers have been claiming that they need the fund to implement the development projects as per the promises they made to the people during the elections.

Past studies have shown that resources marked for special programmes of constituencies have been used to finance party-centric projects, academies run in the name of leaders, implementation of projects through consumer committees led by party cadres and creating personal seed funds.

A special audit conducted by the Office of Auditor General Office in the fiscal year 2016-17 found that the projects related to political parties and their sister organisations as well as non-government organisations related to political parties were selected going against the working procedure. As many as 126 such projects worth Rs53.51 million were selected in 11 districts, according to the auditor general’s report.

In the last fiscal year, the working procedure was amended to stop the fragmentation of resources to some extent by making provisions that stated a maximum of 20 projects can be chosen for implementation with at least two having the cost over Rs5 million. “But in the current fiscal year, fragmentation has been further discouraged by making it mandatory for lawmakers to use half of the budget in the projects which are relatively large,” said Koirala.