After centuries of backwardness, Nepal is in the process of making a significant stride in the economic transformation, transiting from an underdeveloped country to a developing country. To achieve this upgraded position, three indicators related to income, financial risk, and human assets have been fixed. To pave the way for getting upgraded to the position, Nepal needs to pass two of three crucial indicators. Based on the threshold set in the economic risk and human capital indicators, Nepal was eligible for upgrading to a developing country in 2015, but Nepal wanted to be upgraded only much later. However, in terms of per capita income, Nepal is still not qualified to deserve the position within the targeted deadline.
A huge deficit of investment has pushed Nepal’s economic development backward with increasing cost of production and supplies due to poor connectivity. To jack up Nepal’s per capita income, along with many other economic indicators, investment in game-changer infrastructure projects must be promoted and their successful delivery achieved. There is a huge investment gap in the infrastructure sector in Nepal. A huge deficit of investment has pushed Nepal’s economic development backward with increasing cost of production and supplies due to poor connectivity. However, only by increasing investment is not sufficient, we have to be serious about project delivery with agile management. The construction sector in Nepal is still nascent stage with weak management skills and technology as well as skilled human resources.
There must be sufficient debates to bring infrastructure development to the forefront of the national agenda at a time when the country is aspiring to become an upper middle-income country achieving Sustainable Development Goals (SDGs) by 2030. We have a number of instances where projects are being chosen not on the basis of local needs or in consultation with local stakeholders but with the wishes of political people including the Prime Minister, parliamentarians, and ministers, among other influential people who want to gain political leverage with the implementation of such projects. Such a notion of development has been overwhelmingly dominating in the process of project planning and implementation. People need quick wins that can not only be implemented immediately but also offer attractive returns or benefits.
Less preparation inflicting delivery
We have a deeply rooted practice of announcing projects and rushing to implementation without proper groundwork and studies to confirm economic and technical feasibility as well as local needs. Election manifestos of political parties are flooded with a host of plans and projects which don’t match local needs and are not economically as well as technically viable. However, we are spending the least amount of time on project preparation before embarking upon the construction of large infrastructure projects. There is nothing more dangerous than taking a major infrastructure project to the construction stage without prior preparation.
Many problems have cropped up due to the absence of a proper understanding among policymakers about the project cycle. Public education and advocacy in this regard seem essential. A debate is needed on why an infrastructure project should be built in the first place. Whether there is a need for that area or not, whether the people need it or not. We have to find answers to questions such as what else will happen after the projects are built without considering local needs and feasibility studies. Many problems have cropped up due to the absence of a proper understanding among policymakers about the project cycle. Public education and advocacy in this regard seem essential.
If projects are chosen based on the needs of the people, then the basis for choosing that project would be appropriate and such projects will secure buy-in from relevant stakeholders. However, it is not always a matter of building projects based only on the needs of the locals. Because infrastructure projects have to be chosen in line with the larger needs of the country. But the matter does not end there. After prudent selection of the projects, it is important whether the projects are feasible or not.
The feasibility of projects can’t be measured not only from economic and geographical points of view. While developing projects environmental, cultural/social, and technical aspects are required to be factored in. The practice of awarding contracts without even acquiring the land in the projects which are not properly studied to confirm their feasibility for implementation is prevalent in Nepal. Such malpractice has created a situation that has led to time and cost overruns in the projects.
Advance preparation is a helping hand to move the project forward with speed. After the environmental study and assessment of the project, issues of land acquisition, tree clearance, and the ‘right of way’ (in the case of the transmission line) should be settled. Only then should the public procurement (contract) process of the project be started. However, contracts are awarded without conducting a preliminary study and acquiring land for the projects. Such practice has created a situation where projects face delays in implementation due to longer periods for acquiring and studying in terms of economic and technical aspects. Delays in project delivery ultimately causes cost overshoot making the project more expensive.
What should have been done is that after the projects are selected, the preliminary work of the projects should be completed before they are listed in the budget (red book). Considering the impact and size of the projects, project selection can be done only after allocating a minimum of 1 to 3 years of budget to complete the preparatory work. Such preparatory works will minimise the chance of projects getting delayed. To minimise administrative delays, there must be a file tracking system in place to make concerned officials responsible and accountable, especially ministries or departments which are overseeing big infrastructure projects.
Unless we strengthen the preparatory work, the chances of us completing the construction project on time and within the specified cost are very low. We, parallelly, should increase our spending capacity by strengthening necessary human resources and putting in place the scientific system for monitoring and evaluation. Before a construction professional participates in the contract competition for the project, it is necessary to make a checklist to see if such preparatory work has been completed or not. If the regulatory body also oversees whether the pre-preparation has been done or not, it will help not only in our contract system but also to organize the project and complete it on time.
File tracking effective tool
n some cases of construction of infrastructure projects, a one-sided approach of presenting a negative image and blaming only the construction professionals is also dominant practice in society. However, this is not a complete view. Because the builder/company is one party in a construction project. Apart from that, there are also public bodies, monitoring or regulating bodies, and technical (engineering) aspects.
It is wrong to directly blame the construction company for the delay in work. In some cases, construction companies are equally guilty. If the project is not of good quality, the construction company is to blame for not doing quality work. However, the technical side of accepting that quality work as okay is a bigger culprit. There is a provision to blacklist the companies that do not work, it is necessary to bring the government officials who approve the poor work to book.
Necessary procedures should be completed to drive up capital expenditure and expedite implementation. However, the issue of how fast that process is happening is equally important. In order to improve it, it is necessary to be sure which file, which boss or employee can stay for how many hours and days.
Provision should be made that a decision should be made whether or not to proceed with the file within the specified time period. It will speed up the work. Various infrastructure projects have complained that their files have been stuck in various offices, departments, and ministries for months without any action. There is a need to start checking where and why their files are collecting dust. It will be easy to work according to the prescribed plan if there is a provision that such a file can be kept only for a specific period and with certain officials. In the beginning, at least projects of national pride can be brought into this process, its impact will be seen soon.
Improvement in work culture
It was expected that there would be a change in the spending practices after the budget was announced in time. The working culture of our system remains the same. In such conventional practice, capital expenditure can’t be improved. If the government’s development spending can’t be increased, the private sector also can’t be encouraged to spend. Even though federalism has come into force, there is still duplication of projects to be implemented through federal and provincial governments. The number of projects is increasing every passing year. However, the pace of delivery is very poor leading to low capital expenditure. We need to enhance the capacity of our local contractors, providing an opportunity to work with international contractors. To achieve a marked increase in capital expenditure and project delivery, the government should analyse existing pain points and challenges in infrastructure sectors and come up with necessary policy interventions to streamline the process of development spending. Moreover, adequate time and effort should be given to the project preparation phase of the projects so that possible obstacles could be avoided during implementation.
(Source: Federation of Contractors’ Associations of Nepal)