Most economists believe spending on infrastructure has a significant multiplier effect.

During the construction phase, infrastructure generates real cash flow for workers and their families. In the long run, it has a direct and indirect impact on the economy, with a multiplier effect, particularly in job creation.

In Rupandehi, which hosts the industrial city Bhairahawa, and Lumbini, a landmark of the Buddhist world listed as a World Heritage Site by UNESCO in 1997, infrastructure built with a sizeable investment has gone to waste.

Big infrastructure projects like the international convention centre, meditation centre, industrial zones, and Gautam Buddha International Airport have failed to generate income and have turned into veritable white elephants.

Nature has started reclaiming most of the under-utilised infrastructure.

Since 2010, talk of building an international airport led to the construction of large-scale infrastructure, including a bevy of luxury hotels.

Proliferating factories and a rapidly spreading transport network turned the Butwal-Bhairahawa metroplex into an economic powerhouse.

Nepal opened its second international airport in May 2022 in the southern city of Bhairahawa, but no international flight stops there right now.

The objective of building an international airport in Bhairahawa was to bring in more tourists, energise businesses and create jobs. But the situation is just the opposite.

Traders are closing down their shops and moving abroad for decent jobs.

The private sector, too, invested heavily. When the finished project started to sit idle, it hit the sector, and many enterprises were teetering into bankruptcy.

Economists term this development in Lumbini a cascading failure—a breakdown in a system of interconnected parts in which the failure of one or few parts leads to the failure of other parts.

Hem Raj Regmi, deputy chief statistician and data curator at the National Statistics Office, said Lumbini province saw heavy investment from the government and the private sector, but the output has slowed. “Enterprises are unable to raise even the operating cost.”

In the last fiscal year, Lumbini province was estimated to grow at 4.05 percent to a GDP of Rs814 billion, from the low base of the 1.99 percent growth it had achieved in the previous fiscal year.

Lumbini is estimated to contribute 14.26 percent to the national GDP.

The highest value-added growth rate in Lumbini was in electricity and gas, which grew by 28.93 percent, while the manufacturing sector was estimated to shrink by a negative 1.43 percent in the last fiscal year.

Most completed infrastructures in Lumbini have become white elephants, as their expenditures have been growing instead of them generating income.

The Butwal International Convention Center, built with an investment of Rs1.11 billion in ward 10 of Butwal Sub Metropolis, is currently without business.

The centre has 13 halls, each with a capacity to accommodate 2,700 people. The auditorium is the largest of the 13.

The government built the convention centre to organise national and international conferences and events, but it is not generating much income. Construction started in 2014 and the centre was inaugurated in August 2022.

Officials say that the centre is struggling to pay its staff. While the centre is under-utilised and lacks maintenance, bushes have grown around it.

Dharmendra Panthi, chief of the Butwal International Convention Center project, said 22 events or functions have been conducted in the past three years, earning Rs4 million. The centre is currently closed as the provincial cabinet is yet to pass the operating guidelines even in three years.

However, Panthi said they have been occasionally renting the hall on request.

The centre charges Rs96,000 for a day-long event.

Prabin Pathak, president of the Nepal Hoteliers Association, who took part in a recent function at the convention centre, said the infrastructure is in a sorry state due to lack of periodic maintenance.

“If the building is not utilised properly, it will be a waste of tax money,” said Pathak. “The washroom faucets are dry, and it is difficult to sit in the hall due to the stench from the washroom.”

“In Nepal, there is a growing trend of building new infrastructure, but their upkeep is often ignored. This is sad,” Pathak said.

“No one is accountable for the losses the projects incur. Similarly, questions are raised about the quality of construction. In most projects, low-quality materials are used, severely compromising the structural integrity.”

A hall with a capacity to accommodate 5,000 people built near the Buddha’s birthplace, Lumbini, has yet to do any business, except hosting a few functions. It was built with an investment of Rs720 million.

Sanuraja Shakya, member-secretary of the Lumbini Development Trust, said that if a social organisation wants to conduct a function at the centre, they have to pay a fee.

Shakya said that since it is a meditation centre, they do not allow other functions, especially those involving entertainment.

Questions were raised about the construction when the roof started leaking soon after project’s completion. It was repaired later.

Likewise, the Special Economic Zone (SEZ) in Bhairahawa, has not been fully operational for a long time. As factories have not been set up in the SEZ, the area has turned into a jungle. Construction of the SEZ had started in 2003 and it was inaugurated in 2014.

Located in south-central Nepal, the Bhairahawa Special Economic Zone has 69 industrial plots of sizes from 1,400 to 3,700 square metres.

A few industrialists have booked plots, but have not set up their plants as the government has failed to provide pledged services and amenities. The government had promised to provide 24-hour electricity, a one-stop service system, customs, banks, and insurance among other things inside the SEZ.

“Every year, new entrepreneurs book plots, but do not set up their factories due to associated tough conditions,” said Saput Dumre, assistant director of SEZ.

Dumre said industrialists are concerned about the mandatory export provision. According to SEZ guidelines, which were amended three months ago, firms that lease space inside the SEZ must export at least 30 percent of manufactured goods.

“There is a water tank in the SEZ, but it has no water, the weighing machine does not work, the petrol pump is defunct, there are no parking areas, and the road is covered in thick bushes,” said Ujjwal Prasad Kasaju, a central member of the Federation of Nepalese Chambers of Commerce and Industry.

Then there is the new Gautam Buddha International Airport—all dressed up, and nowhere to go. The airport awaits applications for flight slots from international airlines after more than two years of opening.

Nepal's second international airport was ready after ten years and nearly Rs40 billion pumped into the project, but despite the build-up, the expected rush of eager carriers is nowhere to be seen.

The airport is a landmark located in south central Nepal and spread over 787 bighas (533 hectares).

The modern facility has a 15,169-square-metre terminal building that can serve nearly a million passengers a year. The airport's 3,000-metre runway is long enough to handle the largest commercial jets.

However, no commercial jet wants to fly to the airport.