Prof. Dr Govind Raj Pokharel, an Engineer with a PhD in Energy Economics from Germany, was the Executive Director of the Alternative Energy Promotion Centre (AEPC), before being appointed the vice-chairman of the National Planning Commission (NPC) in May this year. He spoke to Siromani Dhungana of New Business Age on issues related to development policies and practices in Nepal. Excerpts:

 

What has been your experience as the vice chair of NPC? 

When I joined NPC, it had already received details of programmes from all ministries and was in consultation with the Finance Ministry to fix the ceilings on government budget for this fiscal year. As part of the budget preparation process we had to attend marathon of meetings with a host of delegations of MPs, local politicians and organizations ranging from local villages to central level. This involvement left me with rarely any time to plan any creative programmes during the first one and a half month of my appointment. However, I have been able to initiate the execution of the 13th National Plan. Even the printing of the plan document was started only after I joined NPC. 

 

The Finance Minister recently complained of lack of big projects to attract investments in Nepal. As the body responsible to identify major projects, what is NPC doing about it? 

I agree that the government lacks bankable projects, especially in the energy sector. During my discussions with private sector stakeholders, like FNCCI and CNI, I found that the private sector is also reluctant to invest in big projects. While the private sector feels lack of environment conducive for investment, the government lacks enough trust on the private sector. In my opinion, for economic prosperity, the government has no other option than to take the private sector into confidence. 

 

For instance, we can be a power surplus country only if the government creates environment conducive for the private sector to invest in the energy sector. We have only a few sizable projects in energy sector because of the government’s failure to persuade the private sector to invest in big projects. 

 

That means lack of coordination between the government and the private sector is the reason for the lack of big projects?

In our context, government agencies and private sector seem to be insoluble as oil and water. We have to take some initiatives to change this chemistry. 

 

The government has failed to ensure private sector friendly bureaucracy. It has not initiated any tangible move to convince bureaucrats that the private sector is the backbone of the economy and, therefore, it is necessary to support it. So first, we have to invest in capacity building of government employees. While in NPC, I will bring a training package for the government employees that will provide insights on the role and importance of private sector in national development. Generally bureaucrats are perceived as inefficient and the private sector is perceived as profiteers. Such trainings will help break such stereotypes. 

 

Secondly, Nepal needs policy reforms to ensure effective development activities. Most of our laws are filled with phrases like “will be punished” or “will be brought to book”.  There are rarely any provisions, which say, “will be rewarded” or “will be promoted”. Our policies are very protectionist and are not compatible with liberal economic policies. We need to change these protectionist policies and introduce laws that will drive the economy into positive direction.

 

NPC has planned to establish a PPP centre for looking into PPP issues. Why is it necessary and when will it comes into operation? 

There is lack of clarity within NPC regarding who is responsible to coordinate, evaluate and assess big projects that come through NPC channel. The proposed public private partnership (PPP) section, as an expert wing, will resolve this issue by facilitating the execution of big projects.

 

It is necessary until the government ensures effectiveness of all agencies that are responsible in project execution. When it becomes obsolete, it might be merged with the Investment Board.

 

NPC has developed a framework on PPP and it is all set to establish this wing within few months. Along with this, we have initiated intensive study on the PPP model. 

 

Don’t you think that we have many agencies and relatively less efficiency?

PPP centre within NPC will work just as a framework and experts’ wing. Concerned ministries will be responsible to execute the projects. It will be primarily responsible to facilitate project execution process by providing expertise services rather than acting as a separate agency.

 

Billions of rupees have been wasted in the form of time and cost overrun executing projects and this is said to be due to lack of coordination among government agencies.  Can this be interpreted as NPC’s failure in reviewing and approving projects? 

I found that most of the government agencies do not follow standard project cycle that consists of detailed project report (DPR), detailed design, procurement process and commissioning before. Sometimes, NPC officials also remain indecisive in approving projects if they fail to comply with the standard project cycle. Financial discipline is not maintained while executing some projects. In many cases, programmes are prepared haphazardly. NPC looks forward to make this process systematic and effective by developing a monitoring framework during my tenure.

 

Basic norms of democracy are accountability and transparency. How do you justify the existence of agency like NPC when these norms are not followed while executing projects?

It is true that our existence depends on our performance. And NPC has failed to maintain disciplinary process so far. Standard project procedures are not followed in many cases and NPC has failed to intervene effectively. It should be accountable to citizens as it runs on their money. 

 

Your statement that the standard project procedures are not followed while approving development projects, shows even NPC is responsible for the delay in project execution. How to end this trend?

This trend cannot be discontinued immediately. But NPC will have to ensure effective monitoring of projects in order to end all malpractices and delay in project execution. NPC should start approving projects based on the real progress made by them. Monitoring system and work division among NPC members should be reviewed and reformed. I am planning to introduce a system whereby a member of NPC will be responsible to look after a region/zone. I do not blame a single agency for the existing dillydallies in project execution. In most of the cases, NPC allocates resources but capital expenditure cannot be ensured, as concerned agencies are themselves not aware of the planning and processes. 

 

Many blame NPC of deviating from its major role of policy formulation body to a project-approval body. What’s your take on this?

Basically, NPC is a policy formulation body. I often highlight three R as its main tasks – Review, Research and Reform. If we strictly follow the planning cycle, NPC won’t be merely engaged in project approvals. It should engage in existing policies review, research on new policies and provide suggestions to the government on policy reforms. 

 

Sometimes, I also feel that NPC has been deviated from its basic duties as government’s advisory body on policy formulation. For that, NPC needs decentralization in the project approval process. Currently, it is involved even in approving small-scale projects that are worth less than Rs 1 million. These rights should be entrusted to local bodies, as it will reduce NPC’s workload. A system should be developed under which NPC visualizes and sets development priorities while all other agencies follow it responsibly. 

 

What are you looking forward to accomplish during your tenure?

I have already started developing a seven-year medium term plan for country’s development. We want to change perception of bureaucrats and people towards private sector. NPC will bring policies that will help convince the general public and the bureaucrats why the private sector’s active participation in development projects is essential and which will also help in attracting private sector investments in development projects. Similarly, addressing negative perception about the ability of the nation to achieve sound economic growth will be the priority. This will breed positive attitude which will help lead the country’s economy towards positive direction.