Performance of Priority One (P1) projects being implemented by the government improved slightly in the last fiscal year, although it is not satisfactory yet.

The government divides its projects into three categories: P1, Priority Two (P2) and Priority Three (P3). In the fiscal year 2016-17, which ended on July 15, 353 projects were identified as P1, 113 projects as P2 and 18 projects as P3.

Of the P1 projects implemented in the last fiscal year, 238, or 67 percent, were able to meet performance target of 80 percent or more. In 2015-16, only 55 percent of the P1 projects had met performance target of 80 percent or more. “Performance of P1 projects improved slightly in the last fiscal year, as supply situation normalised, which allowed contractors to work without facing any hindrance,” said Teertha Raj Dhakal, head of the Monitoring and Evaluation Division at the National Planning Commission (NPC), which prepared the report on performance of P1 projects.

In fiscal year 2015-16, India imposed trade blockade on Nepal from September 2015 to February 2016. The blockade created acute shortage of petroleum products, raw materials, construction materials and almost everything that came from India. This halted or slowed down construction works, affecting large number of P1 projects.

P1 projects generally comprise big development projects, which are crucial for the country to achieve sustained economic growth. Timely implementation of these projects also creates thousands of jobs, which are crucial to lift a fifth of the population that lives under the poverty line. Because of these reasons, it is important to focus on timely implementation of P1 projects.

But Nepal has a long history of delaying implementation of all types of projects, including P1. This is largely because of the government’s weak fund absorptive capacity. In other words, the government cannot use available funds on time because of lack of project preparedness.

This includes delay in formulation of concrete project design and endorsement of various plans to implement projects, frequent staff transfers and delay in launch of procurement process.

In the last fiscal year, the largest number of P1 projects was allocated to the Ministry of Physical Infrastructure and Transport. The ministry was assigned 63 P1 projects, of which, only 40, or 63.5 percent, met performance target of 80 percent or more.

Another ministry to receive biggest chunk of P1 projects was the Ministry of Agricultural Development. It was assigned 31 P1 projects, of which 25, or 81 percent, met performance target of 80 percent or more. Next in line was the Ministry of Federal Affairs and Local Development.

The ministry was allocated 29 P1 projects, of which, 24, or 83 percent, met performance target of 80 percent or more.

“The performance of many ministries is still not satisfactory. But we are regularly monitoring the progress and exerting pressure on officials to complete works on time,” said Dhakal.