Hundreds of road projects in limbo due to government indecisionMost of the projects were included in past budgets under influence from politicians. Such projects will be either cancelled or handed over to subnational governments.
Even though the federal government decided to suspend around 1,400 small road projects in the current fiscal year, it is yet to decide on what to do with the funds allocated for these projects.
The government, through a bill introduced to replace the budget ordinance in early September, had decided to suspend many projects including the around 1,400 small ones that were included in the annual budget without conducting technical and feasibility studies.
“Such projects will be either cancelled or handed over to the provinces or local units based on the necessity and relevance,” the replacement bill states.
According to the Department of Roads, all of these small projects have been allocated just Rs2.4 million each in the current fiscal year. Most of them were included in past budgets under pressure from influential politicians to improve their electoral prospects, officials said.
“Even though the government decided to suspend the implementation of these projects, the government has not yet decided on scrapping or handing them over to the provincial and local governments,” said Shiva Nepal, spokesperson for the roads department. “Due to government indecision on the projects, the allocated funds remain unused.”
The government’s decision, however, does not bar the implementation of projects whose contracts have already been awarded. “A liability of around Rs10 billion has been created following the awarding of the contract,” said Nepal.
If the government does not decide on the projects whose implementation has currently been suspended, the budget allocated for them could be transferred to other projects, according to Nepal.
But, some officials at the roads department suspect that the government might have delayed decisions so that the ruling party’s leaders could use the withheld budget in certain politically beneficial projects. “This cannot be ruled out,” an official at the department said on condition of anonymity. The federal, provincial and local elections are scheduled to be held next year.
The roads department has long been seeking removal of smaller projects from its purview in line with the constitutional jurisdiction of the department, which is a federal authority.
Appendix 5 of the Constitution of Nepal says only the national highways come under the purview of the federal government. This means other roads and bridges should, in principle, be handled by provincial or local governments. But, instead of cutting down their numbers, successive federal governments have continuously been adding such projects.
For example, the erstwhile KP Sharma Oli-led government through the budget ordinance introduced on May 29 increased the number of local road projects to be implemented by the road department to 1,440 from 950 in the previous fiscal year, according to the Annual Programme 2021-22 unveiled by the Ministry of Physical Infrastructure and Transport.
These projects are being implemented under two programmes—Road Infrastructure Development Programme and the Tarai-Madhes Road Infrastructure Special Programme. Also there are many other smaller projects under the Auxiliary Highway Development Programme of the federal government.
The government continued to place such projects under the federal government even though it has been six years since the promulgation of the new constitution, which requires the federal government to handle only the national highways.
“After the latest government decision to suspend the road projects, we have sent a request to our line ministry—the Ministry of Physical Infrastructure and Transport—to remove the suspended small road projects from the purview of the roads department,” said Nepal.
“We have also told the government that we will implement the projects whose contracts have already been awarded if the government ensures funds for the entire contract period.”
He, however, could not give the exact number of road projects whose contracts have already been awarded.
The roads department had announced plans to hand over these projects, some of which are under construction, to provincial and local governments in the last three years. However, citing practical difficulties in transferring several of the projects that were contracted out by the department, the federal government has decided to hand over such projects to provincial and local governments only after their completion.
In the past, there had been an administrative effort to hand over smaller projects to sub-national governments. This time, however, the announcement has been made at the political level through the spending bill.
Even though the current government decided to suspend implementation of many small road projects, it also added around 200 new road projects, which are relatively bigger, according to the department.
Department’s Director General Arjun Jung Thapa told the Post in September that the government added the projects whose cost ranges between Rs20 million and Rs60 million. “The detailed project reports of most of these new projects have yet to be prepared,” he had said.
The department officials say that smaller roads and bridge projects are brought under the federal government under the influence of federal ministries and lawmakers as they have to show to the people that they did something for their constituencies.
“Small projects, despite their insignificant contribution to economic growth, cost the department hugely in terms of personnel, time and effort,” said Nepal. “We could mobilise our staff in more important projects if we don’t need to take up smaller projects.”