Government Slashes Budget for National Pride Projects

Kathmandu. The government has made extensive cuts to the budget for national pride and strategic infrastructure projects for the upcoming fiscal year (2083/084).

A comparative analysis of the annual budget allocation for major infrastructure projects under the Ministry of Physical Infrastructure and the revised budget for the current fiscal year (2082/083) shows that some highly anticipated large projects have been sidelined, while others have seen significant budget reductions.

The Ministry of Finance, in its published expenditure estimate details (Red Book), has stated that the ambitious plan to expand Nepal's railway network and develop metro rail has been postponed for now, with its budget completely cut to 'zero'.

• Railway and Metro Development Plan Sidelined

The railway and metro development project, which has been in discussion for years to connect Nepal to a modern railway network and operate metro rail in the Kathmandu Valley, has become budgetless for the upcoming fiscal year. While this project received a revised budget of NPR 2.72 billion 61 lakh in the current fiscal year, the government has allocated not a single rupee for the upcoming fiscal year (2083/84). However, NPR 3.90 crore has been allocated for the Railway Board.

Source: Government of Nepal

• Budgetary Contraction in National Pride Highways

The budget for the Kathmandu-Terai/Madhesh Expressway (Fast Track), a national pride priority, has also decreased by 27.98 percent. Approximately NPR 6.85 billion has been cut from the budget of this expressway, which is being constructed by the Nepali Army.

While this project was allocated a revised budget of NPR 24.49 billion 47 lakh in the current fiscal year, only NPR 17.64 billion 4 lakh has been allocated for the upcoming year.

Similarly, the budget for the Pushpalal Highway (Mid-Hill Highway), considered the lifeline of the hilly region, has also been reduced by 45.26 percent from NPR 3.94 billion 35 lakh to NPR 2.15 billion 85 lakh. The budget for the Kathmandu Valley Wholesale Water Supply Transmission Project (Second Phase) has also seen a slight reduction, set at NPR 2.20 billion 45 lakh.

Investment Increased in North-South Road, Hulaki, and Melamchi

While the budget for some infrastructure projects has been cut, there has been a significant increase in the budget for strategic North-South highways and the Melamchi Water Supply Project. The allocated budget for the North-South Highways (Karnali, Kaligandaki, and Koshi Corridors) has nearly doubled. While NPR 3.74 billion 33 lakh was spent on this integrated heading in the current fiscal year, NPR 6.25 billion 7 lakh has been allocated for the upcoming year. This is expected to support the policy of expanding trade access with northern and southern neighboring countries.

The budget for the Hulaki Highway, considered the lifeline of the Terai, has also been increased from NPR 3.56 billion 42 lakh to NPR 4.65 billion 6 lakh. There has been a notable improvement in the budget for the Melamchi Water Supply Project, which has been plagued by disputes and natural disasters for a long time.

While NPR 72.69 lakh was allocated for this project in the current fiscal year, the budget for the upcoming fiscal year has been nearly doubled to NPR 1.40 billion 16 lakh, which will help improve regular water distribution to the valley residents.

• What is the current progress status of the projects?

Among the six national pride road projects, the Pushpalal (Mid-Hill) Highway, which started in fiscal year 2064/65, has achieved the highest progress with 82.9 percent physical and 85.48 percent financial progress.

Similarly, the Kaligandaki Corridor has achieved 78.69 percent physical progress. The physical progress of the Hulaki Highway is 73.35 percent.

The physical progress of the Kathmandu-Terai/Madhesh Expressway (Fast Track) is 46.40 percent. While the physical progress of the Koshi Corridor is 45.38 percent, the Karnali Corridor, with an estimated total cost of NPR 666.19 crore, appears to be the slowest with only 17.16 percent physical progress.

In the water supply sector, the first phase of the Melamchi Water Supply Project, which began in fiscal year 2055/056, is 99.52 percent complete, while the progress of the Kathmandu Valley Wholesale Water Supply Transmission Project (Second Phase) is only 10.45 percent so far.

Upon site inspection of the Koshi, Pushpalal, and Karnali Corridors by the National Planning Commission, it was pointed out that sharp turns and excessively steep inclines, contrary to engineering standards, have increased the risk of accidents and the cost due to unnecessary winding, indicating technical flaws that require re-demarcation. Projects have been delayed due to a shortage of stones and gravel and managerial issues where a single contractor holds multiple sections and does not work.

To address this, before the budget, the commission had suggested not giving more than one contract to a single firm. Similarly, before the budget speech, during discussions in parliamentary committee meetings, the commission had suggested providing sufficient budget to complete projects with over 50 percent progress within two years and to resolve environmental and land acquisition issues. However, the budget allocation does not seem to have been made accordingly.