KATHMANDU, Aug 3: With the Ministry of Finance (MoF) on Thursday instructing other ministries not to use their capital budget for land acquisition and construction of new buildings, implementation of mega development projects, particularly infrastructure projects, are likely to be hit hard.
Officials at MoF said the instruction was issued as a part of the government´s austerity measure to prevent unnecessary expenditure and possible leakage of limited budget allocated to the ministries.
But as a majority of large scale projects such as fast track, mid-hill highway and railway projects are in the phase of acquisitioning land, the finance ministry´s instruction is likely to bring the projects to a complete halt.
Only on Monday, Prime Minister Baburam Bhattarai had instructed secretaries to ensure that the national pride projects do not get affected due to insufficient budget.
“Land acquisition process is being carried out for over a year for key projects like Kathmandu-Tarai fast track, mid-hill highway, Tarai postal road and cross-border railway. How can we initiate civil works of the projects without acquiring land?” questioned a senior official at the ministry of physical planning and works.
He told Republica that the finance ministry´s move will affect implementation of the projects in the long run as they will not be able to initiate civil works until the government announces full-fledged budget in next few months.
Minister for Physical Planning and Works Hridayesh Tripathi and Secretary Tulasi Sitaula have expressed concern over the finance ministry´s move to Finance Minister Barshaman Pun and Secretary Krishna Hari Banskota. “We will soon write to MoF on how the finance ministry´s move would affect implementation of the mega infrastructure projects,” said the source at the ministry of physical planning and works.
With the government announcing only one-third budget, the ministry of physical planning is in a position to spend only around Rs 1.5 billion for five national pride projects. The ministry had spent around Rs 1 billion each for Tarai Postal Road and Kathmandu-Tarai Fast Track, Rs 600 million for East-West Electrical Railway, Rs 500 million for North-South Highways and Rs 1.5 billion for Mid-Hill Highway.
“We will witness immediate impact on crucial projects such as Kathmandu-Tarai Fast Track, East -West Electrical Railway, Cross-Border Railway Line Extension Project and Banepa Sindhuli Highway where land acquisition process is being carried out,” said the source.
Biratnagar landowners refuse to pay CGT
Meanwhile, Biratnagar locals who were forced to give up ownership of their land have refused to pay capital gains tax. "This has mainly created problems in distributing compensation for the land acquired for India-Nepal Railway link. Around 25 owners have refused to pay CGT,” said a source.
The government will acquire a total of 300 bighas (about 200 hectares) of land worth Rs 1 billion in Biratnagar for the Biratnagar- Jogbani broad gauge railway link.
India in 2005 has signed an agreement to provide financial assistance to Nepal for the construction of cross-border Kakarbhitta-New Jalpaigudi, Biratnagar-Jogbani, Nepalgunj-Rupaidiya , Bhairahawa-Nautanawa and Janakpur (-Bardibas)- Jayanagar railway link to boost trade between two countries. As per the agreement, Nepal should acquire land before India begins detailed study and construction of the projects.