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Govt issues guidelines on mobilization and utilization of foreign aid

Privacy Policy

The government has issued a 14-point circular for the effective mobilization and utilization of foreign aid on Thursday. It has also instructed the bodies concerned to abide by the circular in letter and spirit.
The government issued this circular taking seriously the topics presented during four separate talks and consultations with the group of executive directors and the vice president of the World Bank and the executive directors' group and the director general of the Asian Development Bank (ADB). The talks were held under the leadership of the Chief Secretary.
According to the directives, foreign assistance should be taken for income-oriented, and medium and big infrastructure projects like electricity, road and airport providing direct employment, doing away with the tendency of taking foreign assistance leading to the scattering of the means and resources of the assistance in geographical regions or small projects.

This has been done in view of the possibility of the means and resources getting scattered, increased cost of monitoring, supervision and evaluation, non-uniformity in quality, spending of much means and resources in report and records and overspending on consultants when foreign assistance is taken or given to small projects/programs.  

The government has also directed through the circular to remove the provision of hiring international consultants except for projects requiring complicated, technical and high skills and knowledge like construction of high dams, tunnels and modern airports etc.

The ministry concerned should make arrangements for implementing the project from own human resources, and in case Nepali consultants need to be hired to do so in small number and for a short period, the circular states.

The government has, likewise, issued directives to the agencies concerned to remove the provision of foreign study tours, visits and training to be borne from the foreign assistance and to completely scrap the provision of foreign study visits/training with the expenses provided by the contractor/consultants in the contract/consultancy services agreement.

The government has also decided not to send anyone on study visit/training abroad at the project's expenses except those appointed by the government and nominated through a decision of the Council of Ministers.

It has also issued directives to the bodies concerned not to purchase expensive and luxurious vehicles, machines, equipments, computers, photocopy and fax machines and furniture, except those indispensable to the project or urgently required for achieving the expected outcome of the project. Likewise, the guideline calls for removing the provision of having a deluxe office.

The government has also issued circulars to all the bodies concerned not to have the provision requiring prior approval/agreement by delegating all the powers and authority to the project chief in the implementation of any project on a trial basis.

The circular also requires making the domestic/foreign advisors and consultants hired in course of implementing the projects responsible towards carrying out works in line with the set time, cost and quality, and asking for compensation from those not extending cooperation to that regard.

The government has also asked the bodies concerned to keep the provision of filing cases against them and claiming for compensation up to a certain period even after the completion of the project in case of damage caused to the government due to serious professional error or negligence on their part.

The directives suggested bringing the projects under the Ministry into implementation enhancing the skill of the officials and that they should ensure the lasting structure and maintenance of the organizations after the conclusion of the projects.

The government has forwarded the necessary process to manage the provision of investment through banks instead of advance budget provided for the mobilization expenses. But such advance amount should not be more than five percent, mentioned in a circular issued by the government.

The advance budget should be provided to the contractor company or the organization once they supplied the raw materials equal to the advance. The companies need to pay 10 per cent interest to the advance amount in case of extension of any project.

The Office of the Prime Minister and Council of Ministers has directed to all the ministries, secretariats, and the government bodies to amend the Public Procurement Act (PPA) and other laws consulting the banks and follow the amended act rather than only following the guidelines of the Asian Development Bank and World Bank.

It is stressed to pay due attention in the above mentioned areas for the effectiveness of the foreign aid as the authorities concerned and the government discussed on such issues and that they have no objection in this regard, thereby, the government directed to implement the circular in letter and spirit.

At the circular issued by Chief Secretary, Lila Mani Poudyal, directed to pay special attention at a time of talks and while signing the agreements for foreign aids and do as the clause (10), Chapter 3, of the Good Governance Act-2064 managed for the right mobilization and use of foreign aid.

Chief Secretary Poudyal directed the government bodies to keep the record whether the officials have followed the circular 'Mobilization and Effective Use of the Foreign Aid ' in letter and spirit and submit it within the 15 days after the end of every fiscal year.