Volume of technical assistance by donors growing in Nepal

Kathmandu, April 27, 2016: Money received by Nepal under technical assistance (TA) from development partners is mostly spent on paying fee of foreign consultants and purchasing luxury vehicles, according to officials of the Office of the Auditor General (OAG).

They also said such spending is not transparent.

A total of Rs 25.67 billion has been spent as technical assistance in Fiscal Year 2014/15 alone, shows the 53rd Annual Report of OAG.

According to OAG officials, volume of TA is increasing with every passing year and high-level bureaucrats have interest on such spending. At least three high-level officials confirmed that the amount in general is spent on paying salary of foreign consultants and purchasing luxury vehicles.

Effectiveness of such spending, mostly in the name of ‘capacity building’, has been questioned since long. The amount is nearly half the annual spending in roads and infrastructure.

Similarly, money received under technical assistance is also used to finance trainings of government officials and consultants in foreign countries.

But such spending is not recorded in government’s financial reporting. As a result, it attracts interests of top bureaucrats and even political leaders.

OAG has long been directing the government to bring such spending under annual budget and programs. But it has not happened so far.

As many as 24 ministries and government agencies as well as constitutional bodies are found to have received such assistance. Ministry of
Finance signed 154 such agreements with development partners in 2014/15 alone.

Meanwhile, figures of TA recorded in Development Cooperation Report (DCR) 2016, which was unveiled on Sunday, is different from the statistics maintained by OAG. The report says Rs 19.59 billion (US$ 184 million) was spent in TA in the fiscal year. The difference might be because OAG maintains statistics from government data, while DCR compiles data provided by donors.

Report shows that Australia and Germany spent more than 50 percent of their total assistance under technical assistance in 2014/15. Similarly, such spending by UN agencies is about 80 percent of their total aid to Nepal.
Korea and Kuwait provided all its aid in 2014/15 under TA.

An official of National Planning Commission (NPC), who preferred anonymity, said most of the ministries and government agencies are enjoying TA from donors and that the relevance of such assistance was eroding. “There are few relevant TAs though,” the official added.

Surya Raj Acharya, an infrastructure policy expert, said bilateral donors are interested to provide TA. “At times, such spending is in periphery of country’s development agendas instead of priorities,” he said, adding: “Experiences show that programs of TA have made development works troublesome as they come with unnecessary environment and safeguard measures.”

Bilateral donors and UN agencies tend to provide some fund in major programs of government through budgetary system and also disburse technical assistance linking the main project. But such spending is done on their own.