Although the government has put strong emphasis on the infrastructure development in the annual budget presented on Saturday, experts have questioned the government’s ability to implement its promises given its track record.

The government has ambitiously allocated resources for projects like Kathmandu-Nijgadh Fast Track, Mid-hill Highway, Postal Highway, Budhi Gandaki Hydropower Project, Gautam Buddha Regional International Airport, Pokhara International Airport, Second International Airport in Nijgadh and irrigation project in the Tarai, among others.

However, given the government’s poor performance in terms of spending in the past years, experts doubt about the successful development of the aforementioned projects.

“When we look at the budget allocation, it seems like government has prioritised infrastructure development,” said Rameshwar Prasad Khanal, former finance secretary. “But given the government’s track record of poor implementation, I have doubts over the government’s ability to actually develop these projects.”

After deciding to develop the Kathmandu-Nijgadh Fast Track on its own, the government has allocated Rs10 billion for the road project. It plans to set up a prioritised office with technical human resources for the project development. The budget has adopted a provision for a special mechanism to inspect as well as facilitate the project.

In the budget for FY2016-17, Finance Minister Bishnu Paudel has allocated Rs2.88 billion for the Mid-Hill Highway project and plans to complete its construction in the next five years.  The Postal Highway has received Rs4.2 billion allocation.

The budget has given due attention to the hydropower development and has allocated resources for projects to be build by the government. It has allocated Rs5.33 billion for 1,200MW Budhigandaki Hydropower Project, which is currently in the process of land acquisition. 

The project’s development committee had been demanding more than Rs30 billion. The budget, however, has decided to levy infrastructure tax of Rs5 per litre on petrol, diesel and aviation fuel. The collected revenue will be used for the development of the Budhigandaki hydro project.  

The budget has also promised to facilitate hydropower projects like Arun III and Upper Karnali that are being developed by Indian companies. 

However, private sector companies involved in hydropower development have lamented the budget has announced nothing to encourage them to invest in hydroelectricity generation. “There are no concrete plans on engaging the private sector in hydropower development,” said Subarna Das Shrestha, immediate past president of Independent Power Producers’ Association, Nepal.