Sunday, December 9, 2018

Nepal India power trade, subnational government's budget execution and more

From The Kathmandu Post: India opened the door wider to power exporters by removing a discriminatory provision in the Guidelines on Cross Border Trade of Electricity under which Nepali-based hydropower projects which are owned by the Indian government or have a majority Indian share are only allowed to export power to India. This condition essentially bars plants built with Nepali or third country funding from exporting electricity to India, and its removal has been hailed as a major boost for Nepal’s energy sector.

According to the Energy Ministry and the Indian Embassy, the Indian Power Ministry has prepared a new draft of the guidelines minus the provision allowing only Nepali-based companies wholly owned by the Indian government or the public sector or private companies with a 51 percent or more Indian stake to sell power to India. Moreover, companies owned or controlled by the Nepal government will be able to export power to India after getting a one-time approval from Indian authorities, as per the guidelines.

According to the guidelines issued by the Indian Power Ministry in December 2016, other companies wishing to sell power to India have to obtain the approval of the designated authority on a case-by-case basis. The provision was discouraging to foreign investors and private Nepali power developers planning to build export-oriented hydropower projects with an eye on the Indian market.

From The Kathmandu Post: Even as pressure builds on the government to resume movement of Nepalis to work in Malaysia without further delay, officials say it will take more time as both the countries are working for implementation of a bilateral deal. Nepal and Malaysia signed a much-awaited labour agreement on October 29. This was expected to resume departures of Nepali workers for Malaysia, which has been halted since mid-May. However, there has been no significant progress towards that end.

Minister for Labour, Employment and Social Security Gokarna Bista told the Post that the government was working to complete the process so that Nepalis can work in Malaysia again. “The labour deal with Malaysia was signed after years. We need to work for putting the agreement into practice. There is still some work to be done before we allow workers to migrate to Malaysia,” said Minister Bista.

According to him, joint working committees are thrashing out issues. The delay in resuming worker departures for Malaysia five weeks after signing the labour pact has irked recruiting agencies as well as political leaders from the opposition Nepali Congress.

From The Kathmandu Post: The federal government’s delay in handing over the key institutions and deputing the required number of civil servants has hit the provincial governments’ ability to spend. In the first five months of the current fiscal year, the provincial governments have spent only two percent of their budget on an average. 

The combined budget of all the seven provinces for the current fiscal year is Rs113.43 billion whereas their combined spending stood at Rs2.36 billion as of December 5. This shows that budget utilisation of the provinces is much below the federal government’s. Singha Durbar spent 20.91 percent of its total budget in the same period, according to the federal finance ministry.

The dismal spending by provincial governments comes at a time when the federal government itself is criticised for its poor spending. Provincial governments, however, blame Kathmandu for the poor implementation of the budget.“The failure of the federal government to depute necessary staff to the provinces and the frequent transfers of officials at the provinces, particularly the secretaries, are the main reasons behind the poor spending,” said Province-2 Finance Minister Bijaya Kumar Yadav. “How can budget be implemented without the bureaucracy?”

According to the Ministry of Federal Affairs and General Administration, only around 12,900 civil servants have been mobilised at the provinces against the need for 21,000.

Govt takes over projects meant for provinces

From The Himalayan Times: The federal government has taken over some development projects supposed to be under the jurisdiction of provinces. The federal government had stated in the budget that some key development projects would be under the jurisdiction of provinces but now it has taken control of them.

The projects the federal government has taken over include:  The 10  Mid-Mountain Highway Cities, 15 linkage roads of the postal highway in Tarai-Madhes, Jhamak Kumari Ghimire foundation, nine risky settlements including in Bajura and the four municipalities of Province 7 funded by the Asian Development Bank. The  budget had stated that these projects would be under the provincial government’s jurisdiction. According to the Ministry of Urban Development, the provinces have expressed dissatisfaction with the federal government’s decision.

Spokesperson of the Ministry of Urban Development Krishna Prasad Dawadi told THT the Cabinet had decided to this effect on November 19 after consulting the federal finance ministry. “The federal government decided to take over these projects because provincial governments lacked skilled manpower and had failed to open offices to execute the projects,” he added.  He said the other reason was involvement of foreign donors in the projects and the risk of high variation order on account of delay. “The donors had also expressed concerns regarding some projects,” Dawadi added. Dawadi said the federal government would gradually hand over these projects to the provincial governments.