First Business News Portal in English from Nepal
KATHMANDU: The government has introduced the Multi-year Contract Work Procedure-2023 in a bid to address the issues plaguing multi-year projects.
Multi-year projects encompass significant, standalone undertakings that span multiple calendar years and cannot be subdivided into smaller, self-contained phases. Unfortunately, these development initiatives often experience delays and are seldom completed on schedule.
Despite the federal government’s allocation of necessary funds, many projects under multi-year contracts progress at a sluggish pace. Delays in project delivery, a lack of ownership, and insufficient human resources contribute to the slow progress of these multi-year contract projects.
According to officials from the Ministry of Finance (MoF), these projects are frequently included in budgets without confirming their funding sources. Moreover, delays are predominantly attributed to the protracted process of contract awarding.
In a recent development, the Commission for the Investigation of Abuse of Authority (CIAA) has advised the government to restrict the inclusion of only readily executable projects in its listings to secure the required funds. In a 22-point recommendation to federal, provincial, and local authorities, this anti-corruption watchdog highlighted various irregularities in budget formulation and implementation that facilitate the misappropriation of public funds.
Dhani Ram Sharma, a joint-secretary at the MoF, disclosed that the new guidelines establish a minimum project duration of three years for classification as a multi-year project. However, national flagship projects will automatically fall into this category, regardless of their construction timeline.
Under the new regulations, these projects should have an estimated cost of at least Rs 500 million and must secure approval from the MoF regarding the finalization of their funding sources. Additionally, projects are required to allocate a minimum of 25 percent of the estimated costs at the beginning of the fiscal year, once they are included in the budget.
Furthermore, line ministries are now prohibited from exceeding the budget limit for a given fiscal year. This is a departure from the previous practice, which lacked such limitations for multi-year projects.
Currently, political parties frequently insert these projects into the budget with the intention of securing a substantial allocation from the MoF. Analysts believe that the new guidelines could put an end to the improper practice of including projects in the budget due to political pressure.
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