The government is the largest procuring body in Nepal with annual procurement spending totaling around US$ 650 million, or 20 percent of the national GDP. In addition, nearly half of Nepal’s budget is allocated to development and large amount of this sum, more than 60 percent, is disbursed on procurement. Out of that, majority portion is spent for roads and other infrastructure procurement following the government’s priority to develop physical infrastructures.
These funds, as well as other scarce resources, have to be put to effective use to maximize potential benefits for Nepali population. Some of the strong measures in this regard is to make public spending well governed, efficient, effective and ensure value for money and integrity. There is a need of community monitoring to address these measures.
Rationale of context analysis
Context analysis is one of the tools to carry out monitoring activities. The analysis of the context derives its logic from the infrastructure procurement monitoring in order to understand the scenario of infrastructure procurement in the type of procurement data on the infrastructure projects and particular selected area. Analysis is done in order to identify the accessibility of situation on the procurement system and data that could be locally accessed risks when monitoring is operated. It will further help to understand the real
Key actions performed for analyzing the context
Series of meeting was conducted to start with the analysis of context and selection of projects. Several pre-discussion meetings were held to understand the red flags, listing the red flags and developing the guideline. From the meeting, it was data on procurement system. The meeting was followed up by orientation of the prioritized to conduct the context analysis to get the first level of ground project.
Contextual Analysis orientation meeting was conducted on 30th April, 2018 with the team of Young Innovation, OCP focal person from Nepal — Louisa, CAHURAST project team-central and district level. The team selected one Municipality each from project developed context analysis template. District focal updated the projects district to create the impact story on procurement system of specific area and that are accessible with data and information, on any sector which helps to select sector wise specific projects to monitor. Context analysis was done to figure out the existing status or trend on the procurement system at project districts — Bara and Kavre. Context analysis has drawn easily accessible information on existing data.
Context Analysis Major Findings:
In the fiscal year 2074/75, to meet the need of total population 123659 (2017 census data), an approximately 900 Million Budget has been allocated for development programs at Kalaiya Sub Metropolitan city of Bara district whilst more than 500 million has been allocated at Banepa Municipality of Kavre district for total population of 55000. (Source: District Annual plan)
Status of Infrastructure Procurement
400 Million Budget Vs. 230 Infrastructure Projects at Kalaiya Sub-Metropolitan city and 150 Million Budget vs 421 infrastructure projects at Banepa Municipality (fiscal year 2074/75)
For the fiscal year2074/75, Kalaiya Sub Metropolitan City received a sum of NPR 913246205.2 and NPR 513274000 has been received by Banepa Municipality. Out of them, Worth of 433666205.23 amount has been allocated for 230 infrastructure projects and worth of 150000000 amount for 421 projects. All the projects are being implemented by User Committee in the fiscal year 2074/75. Due to the political interest, the year budget has been disbursed into the wards with less than 10 million budget for infrastructure project. So, for the monitoring process, 20 projects at Kalaiya and 34 projects at Banepa with adjoining 4 Municipalities from earlier year with life span upto 3 year i.e. being implemented from the previous few years has been chosen and analyzed for their strategic importance, status and data availability.
Two major procuring entities (Division Office, Parsa and District Technical Office, Kalaiya) for e-bidding at Kalaiya and three major procuring entities (Division Office, Kavre)at Kavre. Out of 20 projects at Bara, 10 projects are under the User committees and 10 projects have gone through e-bidding process. Whereas, in Kavre, out of 34 projects, 20 are under the user committee and 3 have gone through bidding process and 8 projects by DLPIU and 2 schools by District Education Office has provided the amount directly to the schools which are selected for monitoring purpose.
91 million worth projects procured through e-bidding: In the light of both districts, in 20 infrastructure project (10 at Kavre and 10 at Kalaiya) are finalized for monitoring. In 10 projects of Kavre, 20% projects are through e-bidding process worth of 32 million and remaining are from direct source to the implementing agency worth 48 million. In 10 projects of Bara, 30% projects are being implemented by User/Consumer Committees with a worth of 9 million whilst 70% have undergone the competitive electronic bidding process with worth 59 million. The projects being implemented by user committee has a threshold amount of 10 million to 100 million budget and more than that through contractors.
Roads sector prioritized for monitoring at Kalaiya and Government Buildings at Kavre: The preliminary contextual study showed that lack of transparent data and information disseminated to the community has lead the delay in project completion indicates that the value for money is not followed and might have the red flags. So, the monitors have chosen the road sector to get monitored to bring a impact on their community.
However, 10 government buildings are finalized at Kavre. The projects were selected on the basis of preliminary red flags found within the project.
Major problems associated with the procurement:
- When the project goes to the community level, there will be no e-bidding system
- Elected representative of local government are from different parties and have their own interest. So, the amount has been disbursed among the wards.
- There is no integrated policy of development because local governments are new.
- The provision of threshold on e-bidding is also one of the barrier.
Major problems associated with the project
- Delay in projects completion
- No proper agreement done between user committee and municipality in the Government funded projects
- Projects in order to ensure that the budget won’t freeze, the work is speed up but with less qualitative work hindering the value for money with a high chance of fraud and corruption.
- The key contractor who bid the contract stays out of the project giving the subcontracts.
Monitoring using the portal is the new initiative of Civil Society in Nepal. This initiative will be key to make aware the community.
Prepared By Christina Nakarmi, OCP Coordinator
24th June, 2018