Govt to hold study to identify root causes

KATHMANDU, MAY 25 - The government is planning to hold a study within July-end to identify the root causes of under-spending of the capital budget.

In a proposed action plan to be carried out to improve the performance of development projects, the government aims to draft Budget Management and Fiscal Responsibility Law and submit it to the Cabinet by December 30, 2014.

The Finance Ministry is preparing the action plan under the Nepal Portfolio Performance Review (NPPR), a mechanism to review the progress of donor-funded projects.

Kailash Raj Pokharel, under secretary at the ministry, said the proposed action plan is yet to get a final shape as final discussions on the proposal are yet to be held. He said as poor capital budget spending has emerged as the biggest challenge in the recent years, the proposal seeks to find out the root causes of poor spending.

In the last few years, delayed budget presentation and late endorsement were blamed for poor capital spending. However, despite timely budget presentation and approval of programmes by the National Planning Commission this year, the spending did not improve. As of May 21, capital expenditure was at 38 percent of total allocated capital budget.

“We plan to find out if a delayed budget presentation was the only reason or other factors are responsible for low capital spending,” said Pokharel.

Given local government authorities facing governance issues, the proposed action plan states a pilot district development committee financial accounting management package would be implemented in two districts within December 30.

The action plan also aims to make a provision of “single stage one envelope system” to reduce the evaluation time to 45 days for international bidding and 30 days for national bidding.

The government is currently working on a new Public Procurement Act which is expected to expedite purchase procedures. Under existing provisions, bidders have to go through two time-consuming processes—pre-qualification and post qualification—for purchasing goods and services. The action plan also aims to implement e-bidding in various donor funded projects and make available adequate human resources to undertake the e-bidding process. E-bidding is expected to aid transparency in the procurement process.

Amid complaints from donors about frequent transfer of government staff from development projects, the proposed action plan aims to implement a transfer guideline as per the Civil Service Act. A personal database of transfer, vacancy, scholarship and disciplinary action of the government staff has also been planned.

The government will also implement an incentive plan for staff motivation, particularly to retain them in the rural areas amid complaints about government employees not willing to stay in rural areas.

As per the proposed action plan, donors are expected to increase their reporting about aid in the Aid Management Platform (AMP) installed at the Finance Ministry. Development partners have been expected to report about indicative planned disbursement for the next fiscal year into the AMP by July and actual disbursement on a trimester basis.