Government signs aid accords worth Rs90bThe government has so far signed accords worth more than $856 million (Rs89.88 billion ) out of the total amount of $4.1 billion (Rs446 billion) pledged for reconstruction during the last donor conference held in June 2015, according to the Finance Ministry.
The government has so far signed accords worth more than $856 million (Rs89.88 billion ) out of the total amount of $4.1 billion (Rs446 billion) pledged for reconstruction during the last donor conference held in June 2015, according to the Finance Ministry.
Nepal has signed agreements with the World Bank, Asian Development Bank, International Monetary Fund, Japan, Germany and China for portions of their aid commitments to rebuild infrastructure destroyed by the earthquake.
Although India and China had made the highest aid pledges for reconstruction worth $1 billion and $480 million respectively, the government has so far signed an agreement with China to use just $10 million of the promised amount.
Finance Ministry officials said that delays in the establishment of the authority also slowed the signing of aid agreements with potential donors.
Stalled reconstruction work has led to delays in signing aid agreements with foreign donors who committed huge amounts.
“Donors remained in a wait-and-see mode while asking us to set up the authority as soon as possible,” said Finance Under-Secretary Bhuwan Karki. “Signing aid agreements involves lengthy paperwork which is also taking a lot of time.”
Nepal and India discussed utilizing its promised assistance only during Finance Minister Bishnu Poudel’s visit to Delhi this week.
Delays in forming the authority also pushed back the signing of an agreement with the European Union for its planned budgetary support of 100 million euros. “One of the conditions for the loan was that the authority should be formed. As the NRA has been set up, the process is moving forward well,” said Karki.
Apart from delays in signing aid deals, the government has not been able to spend the budget allocation for reconstruction, most of which is foreign aid.
The government has earmarked Rs74 billion out of the total reconstruction budget of Rs91 billion for the NRA. However, NRA officials said that nothing has been spent from the budget as the authority is still preparing a reconstruction plan.
The Finance Ministry has released Rs6 billion to be distributed among quake victims to buy warm clothes from the allocated amount and another Rs230 million for the NRA’s administrative expenses. The authority has planned to launch the reconstruction work from Dolakha district on February 24.
“The budget will be spent in a speedy way once the rebuilding plans are completed,” said Madhu Sudan Adhikari, acting secretary of the NRA. “We have aimed to spend as much of the allocated amount as possible,” he added.
According to the Finance Ministry, only Rs16 billion out of the Rs74 billion set aside for the NRA will come from the government’s treasury while the major portion consists of donor funding. The NRA is currently working to determine which donor has pledged how much, said Adhikari.
Seven months into the fiscal year, the NRA will find it difficult to spend the entire amount as the procurement, land acquisition and environmental assessment, which are time-consuming processes, will need to be completed first before the actual reconstruction can begin.
The NRA has said that it has been seeking details about the spending made for reconstruction from another allocation of Rs17 billion which was directly made to various ministries.
Meanwhile, donors have expressed concern over delays in starting reconstruction and the government’s spending capacity. Asian Development Bank Country Director for Nepal Kenichi Yokoyama said during a roundtable organised by The Kathmandu Post that reconstruction, mainly of schools, hospitals and other public property, had been delayed by two to three months from the expected starting date.
He also doubted whether the government would be able to spend the money for reconstruction as it has been struggling to spend $1 billion in capital expenditure. “An additional $1 billion has been allocated for reconstruction,” said Yokoyama.