Minister Shrestha Highlights Rising Project Costs Due to Delays

Kathmandu. Minister for Energy, Water Resources and Irrigation, Biraj Shrestha, has stated that project costs are increasing unnaturally due to delays in development construction. His statement indicated that the tendency of not completing work on time is making development expensive and raising questions about the relevance of investment itself. Speaking at a meeting of the Infrastructure Development Committee under the House of Representatives on Friday, Minister Shrestha mentioned that internal delays, along with inflation caused by international factors, are increasing the cost of development. He clarified that work which should have been completed earlier at a certain price now has to be done at a higher cost due to delays. He warned that if the cost of private sector investment in the hydropower sector continues to rise in this manner, a major debate will arise at a certain point about whether this investment is relevant or irrelevant. In the meeting, Minister Shrestha pointed out the complexities in public procurement processes and contract management. Stating that the cancellation of contracts midway and the halting of work create uncertainty, he emphasized the need to close such loopholes through intensive discussions after the budget. He argued that such instability negatively affects Foreign Direct Investment (FDI) and the morale of the private sector. While presenting his views, Minister Shrestha said, 'We have talked a lot about price increases. This has happened due to issues in the Gulf, but along with that, due to time-consuming matters, our development construction is not only becoming slow but also expensive. If these things that should have happened earlier had happened, at what cost they would have been done, now due to the delay, we are also moving towards higher costs. When we talk about hydro, what I feel is that if the private sector's investment in it continues to become more expensive than it should be, at some point, we might even go into a big debate about whether hydro investment is relevant or irrelevant. But it is not too late yet.' He added, 'Another time-consuming aspect is that after we have done everything, at some point, the contract gets cancelled. It gets stuck in the middle, so there is a lot of uncertainty and complexity about what to do in such situations. Through the honorable chairman, I request the committee to have more intensive discussions on how to close such loopholes after the budget. This affects FDI. It affects the inspiration and encouragement of private sector investment. Now, because of these things, it is not practical, we call international best practices FDI, we talk about attracting investment, but it is also necessary to discuss how much our structure is helping it or not.' To make development construction work of quality, Minister Shrestha also urged the Infrastructure Committee to actively monitor. He expressed confidence that if the committee creates a system for monitoring any project in the work done by the ministry, it will inspire work and help bring responsible people within the scope of accountability.