Think twice before preparing project reports, says panelThe parliamentary Develo-pment Committee has directed the government to prepare detailed project reports, detailed feasibility studies or such other reports on mega infrastructure projects only after considering their long-term benefit, as they were becoming a big financial burden on the state.
The parliamentary Develo-pment Committee has directed the government to prepare detailed project reports, detailed feasibility studies or such other reports on mega infrastructure projects only after considering their long-term benefit, as they were becoming a big financial burden on the state.
Report writing has turned into a ‘big business’ and it has been draining government resources, said Rabindra Adhikari, chairman of the House panel. “Such reports are normally prepared for investment approval, preparation and execution of projects. In Nepal, the reports are prepared haphazardly,” he said.
“Is the detailed project report prepared for the proposed 76-km expressway linking the Capital with Nijgadh in the southern plains still relevant?” he said.
The government owes the company that prepared the report more than Rs600 million. The Asian Development Bank (ADB) had also prepared a separate feasibility report in 2014.
The parliamentary committee said on Wednesday that haphazard preparation of reports had been affecting project execution.
Likewise, a study report prepared for the proposed Nijgadh international airport will cost the government more than Rs600 million.
The Landmark Worldwide Company (LMW) of Korea had conducted the detailed feasibility study of the international airport in Bara at a cost of $3.55 million and submitted it to the government in April 2012. It received the contract to carry out the study in March 2010.
LMW’s report has proposed constructing the airport under the ‘build own operate and transfer’ (Boot) model. It has estimated a price tag of Rs65 billion for the first phase. As per the deal, the Korean company would not charge the government for the study if it got the contract to build the airport.
However, the government has decided to have the Civil Aviation Authority of Nepal (Caan) prepare a fresh detailed project report, which means LMW will have to be reimbursed for the amount it has spent on creating the report. According to Tourism Ministry officials, the document is now expected to cost more than Rs600 million after adding opportunity costs and interest. “The government has not reached any conclusion on LMW’s report, and no one has said that the report is not workable,” said a senior official at the Tourism Ministry. “Why does Caan want to spend a pile of money to produce another similar report?” he said.
Interestingly, the Finance Ministry has approved another proposal from International Finance Corporation (IFC), the private sector lending arm of the World Bank, to conduct and prepare a Strategic Options Report for the development of Nijgadh airport and Tribhuvan International Airport.
As per the IFC proposal, it will not charge the government for the study; however, it can sell the report to a potential developer of the project.
Development Committee Chairman Adhikari said that the business of preparing useless detailed project or feasibility reports has flourished in all sectors.