We have almost five decades history of cooperation in Nepal. During this period, we have provided various supports focusing on both hard infrastructure and human capacity development. Our assistances have contributed in socio-economic development of the country. For example, we have constructed the 160 km Sindhuli road. Similarly, 52 percent of the water supply treatment capacity in the Kathmandu Valley was supported by JICA. Likewise, we have assisted in one-third of hydropower generation in Nepal. Meanwhile, JICA developed more than 9,500 classrooms of elementary schools in the country. 

 

In the area of human capacity development, Japan has received 5,520 trainees from Nepal. Meanwhile, 2,585 experts and 1,327 volunteers from Japan have been dispatched to Nepal so far. JICA’s cooperation in the past also contributed in developing good bilateral relation between Japan and Nepal.

 

In order to ensure the planned construction process of the project, we will support both procurement management and construction management of the Department of Road (DOR) which is the implementing agency. For example, in order to secure the proper procurement process, we will check the appropriation of the contractors and the bidding process. Once the contractors are finalised, we will monitor the progress of the construction process. When necessary, we will also provide advises on schedule management to DOR.

 

This is a very important thing to look upon. We always have discussions with the concerned ministries in case of delays in implementing and completing the projects. Nevertheless, it becomes difficult for us to speed up the construction works. Since the implementation capacity of the contractors is weak at present, it is hard to keep up with the timeline set for the construction process. Capacity enhancement of private contractors is necessary and JICA will also work to this end. 

 

It is a project co-financed by the Asian Development Bank (ADB) and JICA. JICA covers the construction of the water treatment plant which will be completed by mid-August. Though the construction of water tunnel which is covered by ADB has been rescheduled repeatedly, it will be also completed in the near future. 

 

16 years have elapsed since the loan agreement of the project was signed in 2001. There are many reasons for the delay in completing the project, the political instability of Nepal being the major one. The armed conflict continued until 2006 and political situation was not stable even after that hindering the overall progress of the project. 

 

In addition, because of the insufficient capacity of the contractor, ADB had to cancel the original contract which also delayed the schedule. Hence the stability of the government and strengthening the implementation capacity of construction companies are important to achieve progress of the projects. Similarly, selection of good contractors is also an important lesson learned from the Melamchi Drinking Water Supply Project. 

 

The project is going well so far. The detailed design survey of the project is on-going which will continue till the end of this year. After that the construction process will start. We will keep up with the schedule as providing clean drinking water to the residents of Pokhara is a very important task to be done. 

 

The project is co-financed by JICA, ADB and other agencies. JICA provides finance to the hydro-mechanical portion such as construction of waterway, powerhouse, and related equipment and ADB covers the civil works. Regarding the JICA portion of the works, we do not have many problems at this moment. Our works are relatively going well. Of course, ADB’s works are also very important for the progress of the project. We’d like to keep close relationship with the Nepal Electricity Authority (NEA) and the Tanahu Hydropower Limited (THL) to expedite the construction process. 

 

Nepal possesses a very big potential in hydropower development. But the pace of the construction of hydropower plants has been very slow and only few have been completed. In order to promote energy sector development, it is necessary to prepare a well-designed master plan for the nationwide development of the hydropower. It seems that project development licenses were given to many companies in the past without careful considerations which caused confusion in the sector. It is heard that many developers who obtained the licenses spent many years without moving ahead with the development of the projects. 

 

At the same time, in order to invite foreign investment to the sector, some policy and regulation changes are necessary. For example, current PPA (Power Purchase Agreement) provision stipulates that the GON purchases electricity not fully in foreign currencies. It makes difficult for foreign companies except the Indian investors to invest in hydropower projects in Nepal considering the risks associated to the fluctuation in foreign exchange rates. So it is important for GON to consider changing such regulations to promote the hydropower development using foreign investments. However, the ongoing policy reform in the Nepali energy sector is positive. The power cut in many parts of the country came to an end starting from last year which has a major impact economically. 

 

Our focus is basically on the implementation and construction of hydropower projects. Agencies including ADB, World Bank and other development partners have been helping the government in policy reform. We support such initiatives.  

 

The limited number of capable construction companies is among the major bottlenecks for developing hard infrastructure in the country. Many large road projects that are under construction have been taking a long time to complete. Ensuring quality construction works keeping up with the timeline has always been very difficult.  It is primarily due to the capacity of the construction companies. So strengthening construction capacity of private contractors should be done under the close cooperation between public and private sectors. 

 

The situation in Nepal is very unique. In many developing countries, shortage of budget is the core problem for development. But in the case of Nepal, the low level of utilization of budget that the government allocates for the projects is the major problem. As a result, large amount of national budget remain unspent every year. So strengthening the implementation capacity of government agencies and private contractors is the main issue here. 

 

There are four stages of Disaster management cycle. First is emergency response. Second is rehabilitation and recovery. Third is prevention and mitigation. And, the fourth is preparedness. JICA has provided seamless support to Nepal in line with this cycle after the earthquake in 2015. Immediately after the great earthquake, we dispatched rescue and relief teams of the Japan Disaster Relief (JDR). We also donated immediate relief items such as tents, blankets, etc.

 

Our focus is now on reconstruction. Currently our major focus is on reconstruction of schools and houses damaged or destroyed by the disaster. We are now supporting the reconstruction process of 300 schools in the quake affected areas. We are also providing support to reconstruct the residential homes. The government has been providing cash subsidy to the affected households to rebuild their homes and we are supporting this policy by providing concessional loans.

 

We will gradually shift to the next stage of prevention and preparedness. We have started to provide support also in this regard. For example, we have developed a risk map of the valley that provides essential information in order to prepare for possible earthquake in the future. Similarly, hazard maps have also been developed for Sindhupalchowk and Gorkha districts. 

 

There are a lot of criticisms on the slow pace of reconstruction. But at the same time we know that the National Reconstruction Authority (NRA) and other related government agencies have been working very hard in order to expedite the reconstruction process.  It is still too early to comment on the reconstruction schedule of the government. But at least we can say that in order to expedite the process, shortage of staffs at NRA and other agencies needs to be improved as soon as possible. Shortage of manpower in both central and local levels has been a major reason for the slow pace reconstruction process.

 

Also, we should recognise that reconstruction is a time consuming process. Japan, for instance, encountered a devastating earthquake in 2011 and the reconstruction process there still is on-going even after six years of the disaster.

 

We have been providing various kinds of training not only for the government officials but also for the masons for quality construction and affected farmers for their livelihood. We will continue such effort further. We plan to dispatch an advisor for local reconstruction to expedite the process in rural areas. We also have plans to vitalize the Community-based Reconstruction Committee for promoting housing reconstruction. 

 

Japanese have fully utilized the lessons learned in the past disasters. It has strengthened preparedness of the government, business community, local communities and individuals. For example, not only the central government but every local government has their own disaster operation manuals to act accordingly in case of disasters. Now many private companies in Japan have prepared Business Continuity Plans (BCPs) for continuous business operation event after the disasters. 

 

The National Building Code has been repeatedly revised after massive earthquakes and subsidy has been provided to promote construction of houses that meet such compliances. Earthquake insurance is also common in Japan. Moreover, evacuation drills and disaster risk education are periodically conducted in every school and community.  Thus by utilizing the past experiences, Japan has built a highly resilient society through the “Build Back Better" concept. We think that Nepal can do similar things. But the important aspect here is how to learn from the lessons of Japan and implement policies and strategies effectively. 

 

JICA has three characteristics in its cooperation. Firstly, it is our focus on infrastructure and human capacity development. We take both as the two wheels and inseparable components for sustainable development.

 

Secondly, we cover a wide range of modalities in development such as concessional loan financing, grant assistance, technical cooperation, volunteer programs and trainings, etc. By adopting such approaches, JICA has met the variety of needs in Nepal. 

Thirdly, it is the wide coverage of the sectors. Our support covers not only transportation, hydropower and water supply, but also agriculture, education, health, governance, reconstruction, etc. As a true partner and friend of Nepal, we will continue to provide various supports that are necessary for development of the country.

 

Nepal till date is not on the radar of Japanese investors as an investment destination. Is JICA doing anything to facilitate the entry of Japanese investors in Nepal?

JICA is in a position to promote Japanese investments in Nepal and has tried to proceed in this regard. We have dispatched Japanese experts to Investment Board of Nepal for this purpose and helped produce the investment guide. So far unfortunately many Japanese private companies are not familiar with Nepal as a possible destination for investment. Their focus is on Southeast Asia and elsewhere. Also, there are various difficulties to attract Japanese investments here. 

 

Japanese manufacturing companies, for example, focus on economies with large population where they can have big markets for their products. Nepal as a market with population of about 30 million might not be commercially viable for them to manufacture and sell products. There are other problems such as lack of proper road connectivity that hinders them to set up manufacturing facilities in Nepal and transport products. Similarly, absence of policies such as IPR laws and continuous supply of electricity to manufacturing establishments might be other reasons for the unwillingness of Japanese companies to invest here. 

 

Support to the local governments will be one of our areas of focus from now. The new local and provincial governments that will be formed after the elections need capacity development. Hence, we are now examining how we can support them. In fact we’ve already started some projects like support for dissemination of community mediation which will contribute to solve the disputes at local levels. We are also supporting the capacity development of the Local Development Training Academy (LDTA).