Infrastructure Development in Nepal Hampered by Proliferation of Small, Ineffective Projects
Summary
Nepal's infrastructure development faces serious challenges due to the proliferation of small fragmented projects, budget misallocation, stalled major projects, and financial crises in the construction sector.
Key Points
- From fiscal year 2074/75 to 2081/82, Nepal saw a rise to 26,085 projects tendered annually, with 73% being small projects valued between NPR 1 million and NPR 10 million.
- The dominance of numerous small projects hinders allocation of budget to large, nationally important projects, stalling major infrastructure development.
- The construction industry faces financial crises, with many projects stalled and contractors defaulting on loans, threatening financial institutions.
- Recommendations include forming a Stalled Project Resolution Commission and amending laws for transparent, effective procurement and sustainable infrastructure development.
