Development Projects Stall in Nepal's Jitpur Simara Sub-Metropolis Due to Budget Shortfall and Unpaid Contractor Bills

Bara. Development works in Jitpur Simara Sub-Metropolis have stalled due to a lack of budget and the inability to pay contractors. The sub-metropolis stated that it owes construction entrepreneurs 470 million rupees. The sub-metropolis is facing a budget deficit of 500 million rupees in the current fiscal year.

The construction of a marketplace in Ward No. 12, Fatehpur, costing 25 million rupees, is incomplete. The contract for this marketplace, funded by the federal government and the local body, was signed in the last fiscal year, but the contractor abandoned the work midway. Similarly, the foundation stone for the ward office building, to be constructed at a cost of 6 million rupees in the same location, has not even been laid.

Likewise, a road blacktopping project spanning approximately 11 kilometers, with a cost of 123.1 million rupees, is also stalled. This road section connects residents of Wards No. 5, 12, 13, 15, and 17. According to Ward No. 12, only 50 percent of the contracted work has been completed. Due to the stalled work, locals have complained about having to travel on muddy roads during the monsoon and dusty roads with large stones during the dry season.

Local Sekh Azam stated that residents of rural areas are suffering because the contractor has abandoned the work. He said, 'The road becomes muddy during the rain, and motorcycles keep getting into accidents on the gravel. Small traders are in trouble because the marketplace is stalled.' Jalima Khatun of Ward No. 13 complained that it is impossible to walk due to the dust, and the number of people suffering from colds and coughs has increased.

Shyamababu Khan, Chairman of Ward No. 12, stated that the work on the marketplace, ward office building, and road blacktopping has stopped because they have not received payment. He mentioned that the work on the ward office building, tendered for 5 million rupees, has not started for two years, causing problems working in a cramped rented space. Furthermore, for two large road blacktopping projects costing 142.6 million rupees and 120 million rupees respectively, only the work on drains and culverts has been completed. The deadline for these two-year-old projects is expiring in Baisakh and Jestha. In the sub-metropolis, 108 projects are under implementation from the fiscal year 2080/81 to 2081/82, some of which are completed with payments pending, while others are in the final stages.

Hemnarayan Chaudhary, Chairman of Ward No. 13, stated that last year's projects are also stalled and contractors are out of contact. He said, 'The municipality has no money; 470 million rupees from last year is yet to be paid, and only 190 million rupees is deposited in the account.' He added that ward-level projects for the current fiscal year could not start due to the budget shortage. Chaudhary complained that projects above 1 million rupees are handled by the municipality, leaving them with no role.

The revenue branch reported that the sub-metropolis had prepared a budget of 2.01 billion rupees for the current fiscal year, which includes a 500 million rupee deficit. Daily collected revenue is entirely spent on staff salaries, allowances, and miscellaneous expenses. Abhayakanta Jha, Chief Engineer of the Sub-Metropolis Technical Branch, stated that the inability to pay even for completed projects is causing problems. According to him, 900 million rupees is required to settle old projects, of which 470 million rupees is pending payment. Engineer Jha informed that due to the lack of funds, the final settlement for 40 contracts from the last fiscal year and 25 from the current fiscal year, totaling 65 contracts, could not be processed.

The vandalism at the sub-metropolis and ward offices during the JNG agitation on Bhadra 23 and 24 has added an additional financial burden of 60 million rupees. Engineer Jha stated that no work can be done in the current fiscal year except for projects funded by the special and complementary budget from the federal government (around 50 million rupees).

Internal Revenue Weakening

Although Jitpur Simara ranks third in revenue collection among local levels in Madhesh Province, the sub-metropolis has lost significant revenue over the last two years by failing to award contracts for river-based materials excavation on time. Previously, during the tenure of the late Krishna Poudel, the revenue collected from rivers was between 120 to 140 million rupees. The contract could not be awarded last year, and this year the process is still ongoing as of the first week of Chaitra. By the end of Falgun in the current fiscal year, the sub-metropolis had collected only 70 million rupees in revenue, whereas in the same period last year, 110 million rupees was collected. The sub-metropolis collects revenue under 34 headings, including property tax, infrastructure service consumption tax, scrap, vehicle tax, land tax, and fees for land registration and recommendations.

'Work Will Not Proceed Without Payment' - Contractor Companies

Contractor companies have stated that they cannot move forward with work until they receive payment. Sugrim Yadav, Field In-charge of Sumit Kalika Construction, said that although 60 percent of the marketplace construction is complete, work has stopped because the running bill of 4 million rupees has not been paid. He mentioned that they cannot use their own funds until money comes from the municipality.

Devraj Chaurasia, head of NK Construction, stated that they cannot work at a loss as the price of steel bars has increased from 80-85 rupees per kilogram to 100 rupees. He attributed the rise in construction material prices to the America-Iran war. Similarly, Saheb Lal Yadav of RS Sivali Mahalakshmi JV Construction also stated that they would only resume the remaining work after receiving payment for the completed work. It has also been observed that some construction companies take multiple contracts in a single municipality, start one project, leave others incomplete, and invest the received payment in other businesses.