Almost half of quake-affected private houses not built

As the mandate of National Reconstruction Authority (NRA) is expiring on December 25, 2020, around half of the quake-affected private houses are yet not built.
“Reconstruction of 62 per cent of private houses that were damaged during the 2015 earthquake has been completed, while 24 per cent of such houses are being rebuilt,” NRA chief executive officer Sushil Gyewali said, presenting the post-earthquake reconstruction progress at the Parliamentary Development and Technology Committee today. “The reconstruction of 479,545 houses has been finished till date while reconstruction of 189,141 such houses is ongoing,” he added.
Gyewali, on the occasion, also claimed that reconstruction progress can be put at 86 per cent of quake-affected houses, if houses that are currently being reconstructed are also taken into account. “The NRA had inked housing grant agreement with 776,427 households,” he said, adding that under three tranches – Rs 100,000, Rs 150,000 and Rs 100,000 – the NRA is providing altogether Rs 350,000 as housing grant for the beneficiaries to rebuild their houses. “Some 99 per cent of housing grant beneficiaries have taken the first tranche of the housing grant from the government, while 80 per cent have taken the second tranche of housing grant and only 67 per cent of the beneficiaries have taken the third tranche of housing grant from NRA.”
The NRA has resettled 4,204 vulnerable settlements – out of 4,929 identified vulnerable settlements after the earthquake – to secured places. “The reconstruction of 71 per cent of 7,553 quake-affected schools has been completed, while 24 per cent of them are under construction,” he added. “The reconstruction of 58 per cent of 1,197 health institutions affected by the earthquake has been completed, whereas reconstruction of 14 per cent of affected health institutions is underway.”
Likewise, the reconstruction of 51 per cent of 753 cultural heritage sites – affected by the earthquake – across seven most affected districts has been completed, while reconstruction of 16 per cent of such cultural monuments is underway, according to the NRA. “Reconstruction of Ranipokhari, Dharahara, Singha Durbar and Kastamandap is ongoing at a good pace.”
Asking the NRA and the government to give due priority to enhance livelihood of quake-affected people and ensure availability of subsidised loan facilities to the quake victims, chair of the Parliamentary Development and Technology Committee Kalyani Khadka directed the NRA to give high priority to reconstruction of damaged houses.

Reconstruction update
Household surveyed – 1,036,568
Eligible for household grants – 820,610
Retrofitting beneficiaries identified – 69,973
Agreement signed with beneficiary – 776,427
Private houses reconstructed – 479,545
Private houses being rebuilt – 189,141
Vulnerable settlements identified – 4,929
Vulnerable settlements resettled – 4,204
Source: NRA

World Bank to provide Rs 274 million grant assistance

The World Bank has agreed to provide $2.75 million (approximately Rs 274 million) grant assistance for the implementation of Pro-poor Urban Regeneration Pilot Project under the Japan Social Development Fund.

The agreement has been signed here today.

The objectives of the project are to contribute to improving the living conditions of poor and vulnerable households in selected wards of the historic core of Lalitpur City by piloting urban regeneration activities and demonstrate the feasibility of an integrated urban regeneration approach to decision-makers in the Kathmandu Valley.

The project consists of four parts Participatory Action Plan for Pro-poor Urban Regeneration, Grant Facility for Pro-poor Urban Regeneration/Sub-grants, Community Awareness and Local Capacity Building for Pro-poor Urban Regeneration and Project Management and Administration, Participatory Monitoring and Evaluation and Knowledge Dissemination.

The Project shall be implemented by Ministry of Urban Development and end in September 2017.

ADB might reduce aid worth $90 million to Nepal

The country could lose aid from Asian Development Bank (ADB) as its performance rating has dropped due to underutlisation of development aid.
The multilateral donor has warned to reduce $90 million, if Nepal fails to expedite project implementation and address issues related to fiscal discipline, according to the ADB.
“Nepal will lose $90 million financial assistance from the ADB in the next two years, due to its failure in addressing issues relating to slow disbursement, financial discipline and delay in implementing ADB-funded projects," finance secretary Shanta Raj Subedi said at the Nepal Country Portfolio Review Meeting (CPRM) organised here by the ADB today.
The government is taking the issue seriously, he said, adding that the ministry has started serious consultation with key officials in concerned ministries to address the delay.
The overall performance rating of Nepal's portfolio in the fiscal year 2012-13 stood at three out of five, said ADB's country director to Nepal Kenichi Yokoyama, on the occasion. The performance review was conducted between January 2012 and this August.
The country stands to get an assistance of only $405.4 million in 2015-16, as against $498.9 million, if the rating goes up to 4.5.
Nepal's allocation from the ADB could be increased by $45 million a year, from the current level of $227 million, if the country can achieve a rating of 4.5, he added.
Last year, ADB provided around $400 million financial aid – including $45 million grant assistance – to Nepal.
Apart from start-up delays, low performance of consultants and contractors, frequent transfer of key project staff, delay in decision making, weak capacity of the Public Procurement Monitoring Office and procurement entities, malpractice during bidding process and low accountability at implementation level due to fluid political environment and absence of local bodies at the central and district level, progress in ADB-funded projects slowed down last year mainly due to two major projects – the $35-million school sector programme and $30-million tunnel construction of the Melamchi Drinking Water Project, the prestige project of the Manila-based multilateral donor.
ADB had to cancel the 27-km tunnel project of Melamchi Drinking Water Project being implemented by a Chinese contractor after the company failed to make adequate progress meant for supplying clean drinking water to Kathmandu Valley.
"We still need to face enormous challenges in terms of improving portfolio performance,” Yokoyama said, adding that it may be further complicated by  the remaining challenges to complete political transition process.
Despite many hurdles, the ADB country director for Nepal said that timely endorsement of the budget and extension of authority to utilise funds allocated for them are some of the positive developments.
“With the new progresses, we hope that the contract award in 2013 can reach close to $300 million,” Yokoyama added. “The five-year Country Partnership Strategy of ADB for Nepal would emphasise on improved portfolio performance and associated institutional development.”
The ADB resident director for Nepal also stressed on the need for effective monitoring and troubleshooting and undergoing reform on budget planning, approval and release, public procurement public financial management and other accountability mechanism.
Since the ADB started supporting Nepal in 1969, the aid agency has extended cumulative assistance of $3.61 billion till the end of 2012. As of August, ADB’s active portfolio amounted to around $1.5 billion with 35 investment projects. But only $605.8 million worth of contracts were awarded or were in the final stages of being awarded in the last fiscal, and only $359.8 million was disbursed.
The contract award and fund disbursement should stand at 70 per cent and 40 per cent, respectively, according to the ADB’s standard but Nepal’s ability to contract or commit only 40 per cent of projects and disburse only 23 per cent of the amount last fiscal year has raised serious questions about proper execution of development projects.
According to portfolio performance review report, Nepal takes a long time to award contracts and disburse funds. Projects on average took 2.5 years to achieve 25 per cent of contract award target and 2.3 years to disburse 10 per cent of loans and grants as of August, the review stated, adding that the delay resulted in underutilisation of the grants and loans.

Four projects receive award
KATHMANDU: The Asian Development Bank (ADB) awarded four projects – Rural Reconstruction and Rehabilitation Sector Project, the Community Managed Irrigated Agriculture Sector Project, the Second Small Towns Water Supply and Sanitation Sector Project, and the Air Transport Capacity Enhancement Project – on Thursday. The ADB-supported projects helped improve water supply and sanitation services, air safety standards and lives of the rural poor and farmers in the country.

Foreign cash loans, grants plunge

Foreign cash loan has declined by more than half, and grants are almost four times less in the first four months of the current fiscal year as compared to the same period last fiscal year.

During the four months of current fiscal year 2012-13, the government has received foreign cash loans of Rs 0.70 billion and foreign cash grants of Rs 4.59 billion, according to the central bank's data for mid-November.

The government had received foreign cash loans of Rs 1.55 billion and foreign cash grants of Rs 11.52 billion in the same period of the last fiscal year.

Uncertain budget and prolonged political transition has made development partners lose their confidence as there is no check and balance mechanism for government expenses due to the absence of a parliament giving enough room for financial indiscipline by the caretaker government and implementing agencies.

EU provides grant worth Euro2m (Rs 210m ) to develop sustainable construction practices in ten districts

The European Union (EU) has provided Euro 2 million (around Rs 210 million) to Deutsche Management Akademie Niedersachsen (DMAN, Germany) to implement the project ‘Vertical Shaft Brick Kiln and other Sustainable Construction Practices, SCPs’ under the EU SWITCH - Asia Programme: Sustainable Consumption and Production.
The EU grant covers 90 per cent of the project cost while the remaining part is being borne by the consortium partners DMAN, Federation of Nepal Cottage and Small Industries (FNCSI) and Skat Foundation, Switzerland.
The project is being implemented in the central part covering ten districts. “It aims at promoting energy efficient and environment friendly production methods,” said the EU office in Kathmandu.
The 40-month project aims to tackle global warming and environmental degradation and is planned as the continuation and scaling up of activities under the former Swiss-funded VSBK/CESEF Project Nepal.
The reduction of environmental degradation will be achieved through interventions at the grassroots level in the construction business focusing on supply chain actors including production and construction workers, technicians, engineers, architects and entrepreneurs like contractors, construction materials producers and real estate developers.
The project will address both the supply and demand sides of the construction business. A further component will be to support Government Institutions to develop Green Building Policies, further underlining sustainable construction practices.

Two projects receive $75m World Bank financing

The World Bank and the government signed agreements today for a combined value of $75 million towards financing the implementation of two projects -- Enhanced Vocational Education and Training Project, and Urban Governance and Development Programme: Emerging Towns Project.
Finance Secretary Krishna Hari Banskota and World Bank Country Director for Nepal Susan Goldmark signed the agreement here today.
Financing for Enhanced Vocational Education and Training project will comprise $20.25 million in grant and $29.75 million in credit, whereas financing for Urban Governance and Development Programme: Emerging Towns Project will comprise $13.75 million in IDA credit and $11.25 million in IDA grant. The credit carries a 0.75 per cent service charge, a 10 year grace period and a maturity of 40 years.
"An inclusive and accessible Technical Education and Vocational Training system can contribute to making Nepali workers more competitive in a globalised market,” said Goldmark. The Enhanced Vocational Education and Training project will help improve access to Technical Education and Vocational Training programmes for disadvantaged youth.
While Nepal has a vibrant workforce, nearly half of the workers have never attended school. The project will help approximately 75,000 Nepali youth get access to short-term skills training, technical education, and opportunities for certifying their existing skills, paying special attention to lagging regions, poor youth, women, and youth belonging to Dalit, Janajati and other marginalised communities, as well as differently abled persons.
Similarly, Urban Governance and Development Programme: Emerging Towns Project will channel municipal grants and provide capital financing for the construction and rehabilitation of socio-economic infrastructure in six participating municipalities – Mechinagar, Dhankuta, Itahari, Lekhnath, Baglung and Tansen.
"Financing will assist municipalities in developing infrastructure that will lead to improved services and greater socio-economic benefits for residents and businesses,” she said, adding that the assistance package signed today will be a blend of credit and grant from the International Development Association (IDA), the World Bank’s concessionary lending arm.
Additional municipalities may be added at a later stage with the expansion of the project. The project will also support institutional development activities in the six municipalities as well as three key central agencies – Ministry of Local Development, Town Development Fund and Department of Urban Development and Building Construction.
The municipal grants will help the participating municipalities achieve immediate service delivery improvements and support community development initiatives while capital financing will address infrastructure backlogs in these municipalities. It will also help develop a rational and transparent system of fiscal transfers to municipalities, as well as for capital financing of urban infrastructure, embedded within the overall intergovernmental fiscal framework.

Foreign aid commitment hits record high

Nepal received almost double to around Rs 100 billion foreign aid commitment in the last fiscal year compared with 2008-09.

At a time when the government's absorption capacity is under doubt, the country received Rs 92,288.48 million foreign aid commitment -- including loan and grants from bilateral and multilateral agencies -- in the fiscal year 2009-10, whereas it was Rs 47,975.23 million a fiscal year ago, according to the Foreign Aid Department at the Finance Ministry (MoF).

"Though, it can not be compared, the foreign aid commitment is huge," said Lal Shanker Ghimire, chief of Foreign Aid Department at the Finance Ministry.

However, the experts are seriously concerned over Nepal's capacity to utilise the aid. "Nepal has been unable to utilise foreign aid in the past few years," said former member of the National Planning Commission (NPC) Dr Posh Raj Pandey.

Out of the total commitment, Rs 25,823.24 is loan from multilateral agencies -- World Bank (Rs 13,492.33 million) and ADB (Rs 12,330.91 million), whereas the remaining Rs 66,465.24 million is grant. "Nepal needs to develop absorbing capacity for the maximum utilisation of the aid," he added.

"For the maximum utilisation, foreign aid has to be utilised on the projects Nepal owns," he said adding that this commitment could help government plan resources for the new fiscal year.

However, the foreign aid commitment in the fiscal year 2008-09 has registered a dismal growth of 2.5 per cent compared with 32.9 per cent in its immediate preceding year.

In monetary term, committed foreign aid was limited to Rs 47,975.3 million in 2008-09 from Rs 49,186.2 million in 2007-08. "Of the total foreign aid commitment for 2008-09, bilateral assistance constituted Rs 27,196.5 million, whereas the multilateral assistance totaled to Rs 20,778.8 million," according to the MoF.

Similarly, bilateral assistance constitutes Rs 36,001.41 million, whereas multilateral assistance constitutes Rs 56,287.07 million in the fiscal year 2009-10.

While classifying the foreign aid into grant and loan components for the year, grants amounted to Rs 43,095.7 million and loans to Rs 4,879.5 million in 2008-09. Foreign grants have increased by 4.9 per cent whereas loans have decreased by 39.9 per cent compared with a fiscal year ago.

Foreign loan has been playing vital role in the Nepali economy. The net outstanding foreign loan totaled Rs 249,965.4 million in the fiscal year 2007-08, which further increased by 10.8 per cent reaching Rs 277,040.4 million in 2008-09.

The budget for the fiscal year 2009-10 has targetted Rs 78.51 billion in foreign assistance -- including grant and loan. It was 27.45 per cent of the total budget of Rs 285.93 billion.

Last budget's target

Total budget -- Rs 285.93 billion

Foreign assistance -- Rs 78.51 billion

Foreign grant -- Rs 56.95 billion

Foreign loan -- Rs 21.56 billion

Nepal targets overhaul of power network to reduce shortages, boost growth

Years of underinvestment in electricity infrastructure has left Nepal with one of the most unreliable power supplies in South Asia, putting a brake on the country’s economic growth.
In response, Asian Development Bank’s (ADB) Board of Directors has approved a loan of $65 million equivalent to strengthen and expand electricity transmission and distribution facilities in a bid to cut network losses and reduce frequent supply interruptions and outages, said the manila-based bank in its press release.
Funds will also be used to upgrade two hydropower plants, introduce compact fluorescent lamps, and install solar and solar-wind powered streetlights in a push to boost energy efficiency, increase the use of clean renewable technologies, and take some of the strain off the national grid. Public-Private franchising partnerships will be developed in selected urban areas to improve service quality to consumers, providing a model that could be replicated in future.
The Energy Access and Efficiency Improvement Project will support the Government of Nepal’s long-term vision to provide universal coverage using grid-based and off-grid supplies by 2027. Installed generating capacity at the end of 2008 was 615 MW with just 33 per cent of households connected to the national grid.
“The project will strengthen and increase supply capacity, increase consumer connections, improve the finances of the state-owned Nepal Electricity Authority, and eventually allow for increased cross-border energy trade, giving the economy a boost,” said Priyantha Wijayatunga, Energy Specialist in ADB’s South Asia Department.
An estimated 20,000 additional households are expected to directly benefit from the distribution improvements, while all 1.5 million grid-connected electricity consumers will receive more reliable power supplies. The installation of 1,000 solar and solar-wind streetlights in municipal areas of Bhaktapur, Kathmandu and Lalitpur will improve safety, particularly for women and children, while the project is expected to reduce an estimated 15,000 to 20,000 tons of carbon dioxide emissions annually.
ADB’s loan from its concessional Asian Development Fund covers 69% of the project cost of $93.7 million. The loan has a 32-year term, including a grace period of 8 years. Interest is charged at one per cent per annum during the grace period and 1.5 per cent per year for the rest of the term.
Grants totaling $4.5 million from the Climate Change Fund and Multi-Donor Clean Energy Fund, administered by ADB, will also be provided. The Government and Nepal Electricity Authority will supply the balance of $24.2 million. Nepal Electricity Authority is the executing agency for the project which is due for completion around September 2014.