Government Tightens the Screw on Mobilization Fund

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Government Tightens the Screw on Mobilization Fund
Workers blacktopping a road in front of Narayanhiti Palace Museum in this recent photo.

November 30: The government has adopted strict measures in releasing mobilization fund after contractors were found taking the amount in advance and not completing their work.

As per the instruction of Prime Minister KP Sharma Oli, the advance given to contractors after signing project agreement has been reduced from 20 percent to 10 percent.

A highly-places source at the Prime Minister’s Office said that the PM decided to take such measures after contractors started undertaking projects beyond their capacity only to leave them incomplete.

“The prime minister has time and again asked about the delay in construction works. Despite this, there has not been any progress. Therefore, the Prime Minister’s Office decided to reduce the mobilization fund,” said the source.

The PMO has instructed the ministries of physical infrastructure and transport as well as energy, urban development, local development, agriculture, industry, water resource among others to tighten the screw on mobilization fund.

Secretary at the Ministry of Physical Infrastructure and Transport Rajeshwar Gyawali confirmed that the ministry has reduced the mobilization fund from 20 percent to 10 percent as per the Public Procurement Regulation following the instruction from PM Oli.

“There has not been any change in the regulation. The regulation states that the government can provide mobilization fund up to 20 percent. We have decided to release up to 10 percent after the instruction from the prime minister,” said Gyawali.

Secretary Gyawali further said that the ministry is planning to release 10 percent mobilization fund in two installments.

“We will release 5 percent mobilization fund after the contractors present their estimate and the other 5 percent will be provided after they start the work,” said Gyawali.

Prime Minister Oli had expressed his dissatisfaction with the concerned ministers and secretaries stating that the capital expenditure in the first four months of the current fiscal year was not satisfactory. The capital expenditure was just 6.76 percent during the period.

The prime minister had also asked the ministries to submit a report on the contracts signed so far and the progress report to the PMO.

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