Thursday, March 8, 2018

Actual capital spending estimated at 70% of planned capital budget for FY2018

From The Kathmandu Post: The government is all set to introduce austerity measures, as its budget deficit is widening due to higher recurrent expenditure, error in calculation of savings in the last fiscal year and low mobilisation of foreign grants. The government’s budget deficit—revenue plus grants minus expenditure—stood at Rs49 billion as of Tuesday, which is around 1.9 percent of the gross domestic product, according to the Ministry of Finance. This deficit had stood at Rs35.5 billion in mid-January.

“This shortage of funds at the central level has prompted us to cut down on spending. However, only unnecessary spending would be slashed,” said Finance Minister Yuba Raj Khatiwada. The austerity measure includes lower spending in purchase of vehicles, fuel and office materials, including computers, according to Finance Secretary Shankar Prasad Adhikari. “Also, number of foreign trips would be reduced,” Adhikari said. “However, adequate funds will be provided to ongoing projects that are making good progress.”

The government has projected capital spending to stand at 70 percent of the allocation at the end of the fiscal year. The government had earmarked Rs335.2 billion for capital spending. But actual spending till the end of the fiscal year is likely to stand at Rs234.6 billion, according to the Finance Ministry. The government had spent only 65 percent of the capital budget in the last fiscal year. 

The Ministry of Finance (MoF) has revised economic growth forecast for the current fiscal year to over 6 percent from 7.2 percent predicted in the beginning of 2017-18. Some of the reasons for the downward revision are fall in production of paddy, which makes major contribution to the gross domestic product, and reduction in consumption due to fall in remittance income.

From The Kathmandu Post: Investment Board Nepal (IBN) and Finnish joint venture Nepwaste initialed a project development agreement (PDA) on Wednesday for the management of solid waste in the Kathmandu Valley, IBN said in a press statement. 
Nepwaste will undertake Package Number 1 of the Kathmandu Valley Integrated Solid Waste Management Project which covers Kathmandu Metropolitan City and nine neighbouring municipalities: Budhanilkantha, Nagarjun, Tokha, Tarakeshwor, Gokarneshwor, Sankharapur, Dakshinkali, Kageshwori-Manohara and Chandragiri.

As per the PDA, Nepwaste will collect a service charge of Rs219 per household per month to pick up their garbage. Nepwaste will build a landfill site at Bancharedanda in Nuwakot and a transfer station at Teku in Kathmandu to manage the solid waste. The company will also set up processing and recycling units at the landfill site. The garbage collected from homes will be segregated into biodegradable and non-biodegradable waste. The company will turn the trash into compost fertilizer, petroleum products and natural gas besides generating up to 5 MW of electricity. Most of the solid waste will be recycled, and only 20 percent will be put in the landfill site. 

The PDA has given a transition period of three months for the project developer to take over the existing waste management system. The company has to hand over the project to the government after 20 years, and pay around Rs3 billion in royalties during the period. IBN has said it will now start PDA negotiations with Clean Valley Company which will undertake waste management in Lalitpur Metropolitan City and adjoining municipalities besides Kirtipur and Bhaktapur under Package Numbers 2 and 3. The estimated cost of the project is Rs5 billion for the first package and Rs2 billion for the second and third packages.