Rural Infrastructure Development & Prospect and Status of Consultancy Business in Nepal

Rural Infrastructure Development &

Prospect and Status of Consultancy Business in Nepal

A Technical Paper by 

Bhim Upadhyaya

1. Background: Socio-Economic Context of Nepal

Geography

The Democratic Republic of Nepal with 147,181 Sq km of total land area with 28 Million populations has got three main ecological regions viz. mountainous region along northern belt, Hilly region in the middle, Plain area along southern belt. Mountain region consist of 35% of land area with 7.3 % population, Hills that of 42% of land with 46% of population, and plain that of 23% of land with 47% of population. Nepal extends across the southern slope of Himalayas between longitudes 80° 4'E and 88° 12'E and latitudes 26° 22' N and 30° 27'N. The country is east to west 885 km long and north to south 193 km wide (average).

Geologically Nepal falls in the Hindkush Himalayan region and it has Ganges plain beginning at the southern region, Shiwalik (Churia), Lesser Himalayan in which falls Mahabharat and Midlands, and Higher Himalayas as it goes towards north.

The elevation range results a great diversity. Nepal ranges from about 60 m to the summit of the World, Mt Everest 8848 m. The lowest belt is called Terai. Altitude-wise, elevation below 1000m covers 36% of area; that of 1000-5000 m range 55% and remaining 9% above 5000 m.

Socio-economy

Nepal is primarily a small agriculture- based economy and one of the least developed countries in the world. Agriculture sector comprises of 65% of total labour force in Nepal. Nepal's gross domestic product GDP per capita income US$ 300 per annum. The contribution to the national economy by the agriculture sector is 39% and that of industry and services are 23% and 39% respectively. The capital formation of the GDP is only 26%. 80% of the GDP is contributed by the private sector.

The population below poverty line (i.e. less than 1$ per day) at the end of the tenth plan period is estimated at 31% and 17% of people are ultra-poor i.e. below absolute poverty.  Urban population stands at 14.2% of total population and rural at 85.8%. The incidence of poverty is greater in the rural areas and in the mountains and hills.   44% of rural households and 23% of urban households lie below poverty line. Except Kathmandu, urban poverty elsewhere is as high as 34%, almost one and half times higher of national urban average. Similarly 56% of mountain, 41% of hills and 42% of plain (Terai) households live below poverty line.

The adult literacy rate is 52.7% and life expectancy is 61.9 years. The population growth rate per annum is 2.25%.

It is estimated that totally unemployed population is 5 % and that of under -employed is 32.3% out of the total population. Approximately 300 thousand unemployed people enter labour market every year seeking employment.

GDP and Transport & Communication Sector

In Nepal transport and communication sector is classified in one sector. There is no separate data available as to how much the transport-sector only contributes to the GDP out of the total contribution of transport and communication sector. The sector is one of the largest sectors in terms of investment in Nepal's development. It has taken up 17.6% of total ninth plan development expenditure and 15.6% of total outlay is planned to invest in the tenth plan.

As against the GDP of the country, transport and communication sector's contribution has been evaluated at 8.6% of total GDP with 6% annual average growth rate.

About 80% of land in Nepal is hill and 85% of its population live in rural areas.

It can be clearly expected from the above figure 1 also that the present scenario is quite lowly. Therefore Nepal has got to plan, implement and invest a manyfold in magnitude compared to the present scenario.

2. Major Policy Framework of the Government for rural Infrastructure Development

The local government Units are operated based on local self-government Act 2055 and its related subordinate regulations. Government of Nepal (GoN) has promulgated Local Infrastructure Development Policy 2061 to develop local infrastructures needed for rural development. Ministry of Local Development is the central governmnent Agency to take care of this business of liaisoning. There is an engineering department named the Department of Local Infrastructure Development and Agricultural Roads (DoLIDAR) to backstop local bodies for all kinds of engineering technical matters what so ever required.  GON has been implementing through these local bodies its present interim target plan for local infrastructure development in Nepal. More than a dozen foreign bilateral and multilateral donor agencies are also financially and technically assisting local infras development in Nepal for long past.

Nepal Agriculture Perspective Plan, APP (1997-2017)

 The 20 years APP has clearly identified that the engine of growth will be agriculture. Agriculture, the largest component of contribution to Nepal's gross national product, dominates employment through its direct and in direct influences. Over the course of the twenty year plan, the rural people living below the poverty line is expected to decline by 5.5 million and will be only one-quarter that at present. The APP states the conditions not only of accelerated growth in agriculture but also of employment growth, which is the key in reducing poverty in Nepal. APP has identified four key component of investment viz. Roads and Power, Irrigation, Agriculture Technology and Use of Chemical Fertilizer.

Development of a huge network of rural agricultural roads has received top priority in this plan. The plan very clearly recognizes that a grid of countrywide agricultural roads is essential not only to precipitate agricultural growth, thereby to encourage population to remain employed in the villages and market towns. The rural roads encourage rural people to reside in the villages; they get the opportunity to work in the key agricultural growth institutions and health and family planning clinics. Agricultural road investment constitutes 20 percent of the priority input investment in the APP. The agricultural road investment in the APP is essential to the high-value commodity strategy i.e. to connect by all weather road for boosting production for commercial purpose wherever feasible high economic value citrus fruits or other high value fruits and herbs production pockets in the hills and mountains. Likewise installation of shallow tube wells to harness easily available groundwater to enhance irrigation facility at lower cost in the Terai, which is also called the granary of the country. Although the incremental capital output ratios are somewhat less favourable for the hills and mountains because of higher construction costs, they are still highly favourable and must be pursued. The APP offers the opportunity to put Nepal onto a fast growth track that will bring rural prosperity, a rapid decline in poverty, diffused urbanization, and an improved environment. As a result a radical decline in poverty, a rapid increase in rural incomes, the broad participation of women in growth and rising incomes, less population pressure in urban areas such as Kathmandu even while total non-agricultural employment grows rapidly and a protected environment even as incomes rise. A total of 6200 km of roads at the average rate of 500 km of roads per year in rural areas are supposed to be built in 20 years period. A vast employment opportunity has been thus foreseen in the rural people through these infrastructure development activities in addition to the economic development.

Aims of Agricultural Roads

·       Agricultural roads programs have the following aims:

·       To link agro-production pockets to market centers,

·       To assist in agricultural commercialization,

·       To facilitate smooth transportation of agricultural inputs and implements round the year.

Strategy and Modality

Agricultural roads development has adopted the following strategy and modality of construction:

·       It is based on community participation, and following decentralized approach,

·       It is local resource and technology based,

·       It is labor-based with minimum use of heavy machineries and capital intensive technology,

·       It is environment friendly,

·       Its modality of management is aimed at poverty reduction by generating local employment,

·       Its focused on strengthening capacity for planning and management of local bodies and community,

·       It has set as a strict development prerequisite, by developing District Transport Master Plan before taking up any construction of roads, to be followed.

            National Transport Policy of Nepal 2001

The principle objective as stated in this policy is to develop a reliable, cost effective, safe facility oriented and sustainable transport system that promotes and sustains the economic, social, cultural and tourism development of Nepal as a whole. The strategies pinpointed are the responsibility demarcation between central and local levels, decentralized governance system by utilizing the local level sources and resources, private sector involvement. National highways, feeder roads, and roads having special objectives are included in the central road system; district roads, village roads, agriculture roads, main trails/tracks and urban roads within municipalities and town development boards are included in the local road system.

 Poverty Reduction Strategy Paper 2001

Poverty has always been an overriding concern of the planned efforts for development. However it was explicitly stated as an objective only since the sixth plan in 1980. The actions for the approach include policy changes, institutional reforms, and implementing targeted programs and projects. This approach paper is also supported by a medium term expenditure framework, which provides three to five years' time bound expenditure action plan of development intervention programs. Deprivation and poverty is not just due to lack of income but also due to lack of access to social sectors like education, health, safe drinking water, sanitation facilities and other services. The poor in general have less access to social services. Increased public expenditure in rural areas has not made much impact in reducing rural poverty. Employment creation is expected to come mainly from sectoral programs as expansion of transportation networks and activities. It has to be 'growth with equity' or 'pro-poor growth' to ensure an active participation of the poor in the country's development process. As suggested by the paper the GoN has established Poverty Alleviation Fund (PAF) to strengthen, coordinate, support and monitor targeted activities directed towards meeting the goal of poverty reduction focusing community preferences.

A 20-Years Road Plan (2002-2022)

 Ministry of Physical Planning and Works has introduced a 20-years road plan for the period of 2002-2022 to cover up to 12^th Plan. Over the years, the country has made an impressive development in the field of road transport. The road density for 10000 population and 100 square km are 6.68 and 10.4 respectively, which are comparatively lower than other countries in the South Asian region. A large number of road projects were under funded, thus this plan has made an urgent change of strategy to concentrate resources in a limited number of prioritised road projects to ensure that the projects are completed within a reasonable period of time. The five objectives set for the plan are i) to strengthen political and administrative linkages, ii) to alleviate poverty, iii) to develop and utilize social, economic and cultural potentials, iv) to minimize total transportation cost and, v) to minimize adverse effects on the environment. A total of 4040 km or roads are to be newly built in the plan period. The objectives are to be fulfilled by implementing strategies of connecting all districts headquarters by roads; providing links to district headquarters with adjacent road network of the neighbouring country; providing reasonable level of services; adopting philosophy of stage-construction adopting environment friendly green road approach; using local resources; minimizing traffic congestion and delays; improving strategic networks.

Priority Investment Plan 1997

Department of Roads prepared a 20-year Perspective Plan for the period 1965-85. This served as a guideline for the development of roads. After the expiry of the term of this plan, need for the second plan for the next twenty years was realized. In the mean time a 10-years master plan for the prioritised roads was undertaken again with assistance of the World Bank, called Priority Investment Plan (PIP) for the period of 1997-2007. This plan was specifically prepared to prioritise investments in the transportation sector. Recommendations of the PIP are to concentrate on maintenance of the existing road network, with modest expansion, and in particular to connections to some previously unconnected District headquarters. The study regarding the development of rural roads states as a conclusion: this study found no particular evidence to support a continuing extension or the further development of the rural/local road networks in areas that already have a basic level of access to wheeled transport. However, the development of low cost rural roads, built with high levels of community participation, may be justified to meet local needs and should be considered on a local area basis.

Local Self Government Act 1999 and Regulations 2000

Nepal has two-tier system of governance viz. central and local and three types of  local government units, called local bodies viz. Village Development Committees (VDCs), Municipalities and District Development Committees (DDCs). The local bodies are governed by a separate Local Self-Governance Act 1999. Local bodies have institutional responsibility, rights and power necessary to formulate and carry out plans at local level as per their needs and priorities. Rural roads, wire bridges, culverts and suspension bridges mule trails and other rural transport modes may be planned, built, operated and maintained by them depending upon their financial capacity. There are very clear articles in the Act that stipulate guidelines for planning and implementing the plans and programs for the poor and for reduction of poverty. Regarding poverty the guidelines categorically state that, 'in formulating plans areas comprising backward castes, tribes and poor people and various development works done or required to be done in such areas and, those that give direct benefit to the general public and are employment and income generation ones are included. Priority has to be given to such projects that can contribute more to income-generating and skill-oriented programs for the backward and downtrodden tribes, communities and the women and children.' Likewise detail process and procedures for implementation of development programs among others are codified in the regulation.

National Strategy for Rural Infrastructure Development 1997

The Strategy has given attention for the effective implementation of the local level infrastructure development plans programs and projects. In order to fulfil the objective and goal set by the long term APP, it is essential to have the rural infrastructure such as roads, mule trails, local trails, bridges, culverts, irrigation schemes, dams, spurs, river training works, water mills, micro-hydro projects, alternative energy projects, hospital, health posts, communication centres, drinking water schemes, schools, community centres, fire fighting centres, structures for solid waste management and others. The strategy paper identifies that there is an extensive diversity in the planning process, implementation modality, used technology, incurred cost, involvement of beneficiaries, planned benefits and the focus of the programs run by different agencies in rural infrastructure sector at local levels. This strategy in its objective setting has tried to address the problems originating from absence of long-term perspective plans, ad-hoc practices in fulfilling the needs, under-utilization of resources and return, under-mobilization of limited technical human resources, lack of coordination among implementing agencies, over investment against the desired benefits and so on. Thus the strategy as its key objective states that 'the development of basic rural infrastructure country-wide in a planned and sustainable means by adopting the labour-based, local resources-oriented, environment-friendly means and in accordance with the decentralized, participatory approach in line with strategy to the poverty alleviation objectives in national plans in such a way that maximum employment income opportunity is created to local residents.

National Plan for Rural Road Maintenance 1999

This plan approved by the GoN was drawn with the objective of initiating planned and regular maintenance, repair or reconstruction / rehabilitation of built road infrastructures in the past which have been overlooked at the cost of new construction projects. It is obvious in the mountain country like Nepal that a road is a major capital investment and it is necessary to preserve it by means of an appropriate maintenance done at an appropriate time. Failure to maintain the road properly leads to rapid deterioration with subsequent increase in vehicle operating cost and road accidents and eventually demands for an expensive reconstruction. Thus proper maintenance will minimize the rate of deterioration of the road and thus prolong its life; provide better running surface and thus reduce the cost of vehicle operation; and ensure reliable and safe transport services. The modality of maintenance is primarily labour-based and local resources oriented to create local employment and income. Cost sharing basis of partnership between central government and the local government for funding has addressed and ensured the priority and needs of the locality in selecting the maintenance projects. The objective of delivering desired services regularly from the ever-increasing different category of local and rural road network, approximately 22,000 km to be maintained properly is addressed by the Plan.

            Local Infrastructure Development Policy 2061

This policy identified 7 sectors as the local infrastructure viz rural transport, rural drinking water and sanitation, rural electrification, small and middle size irrigation programs, solid waste management, rural housing and township program and social infrastructures like community buildings, healthposts, school buildings etc. Also the policy clearly demarcated the classification between central and local level programs.

For transport accessibility, it has set the basic need of access as 2 hours to a nearby motorable road in the plain Terai region and  that of 4 hours in the hill and mountain regions.

                                   

Nepal Road Board Act 2002

         It is estimated that Nepal at present has about NRs 70 billon worth of road infrastructure asset to be maintained and operated regularly.  The annual minimum financial resources requirement for proper maintenance is therefore calculated is NRs 1.3 billion. The total road network including rural roads are estimated at more than 22000 km. DOR is the responsible government organization for maintenance of strategic roads i.e. highways and feeder roads and local bodies viz. VDCs, DDCs and Municipalities that of local roads. The fund so far made available has not been adequate and the priority for proper maintenance did not receive due importance in practice in the past. Therefore the government enacted a special act to mobilize resources autonomously, transparently and effectively by creating its own fund under the act called Nepal Road Board Act 2059 to take care seriously of maintenance to begin with and later to rehabilitation and reconstruction at the minimum cost. It is also envisaged that new roads building can be funded from the fund under this act. The Board under the act has the power and right to impose different kinds of toll tax on the vehicles plying over the roads, levy on fuels, vehicle registration and licensing, road permit fees to generate road fund. Government organizations or/ and local government bodies can execute the maintenance operation.

National 3 years Interim Plan 2062-2065

         Since it was not possible due to political unstability, GoN formulated a 3 years interim investment plan in lieu of 11th Naitional Plan. The Interim plan has set for various intrastructure development physical and financial targets.

3. Rural Road  Presebt Status, Projects Under Implementation and Donors

Table 3.1: Status of Rural Roads in Nepal (as of 2004)

Classification of Rural Road	Length km	Condition of road
		In operation	Not in operation
Earthen	16,875
Gravel	3,882
Blacktop	357
Total	22,105	12,176	9,929

Table 3.2:  20 years' Agricultural Perspective Plan Target

Ecological Zone	20 years Target		Phase I (first 10 years) Target		Phase II (second 10 years) Target
	Physical  km	Financial  Rs million	Physical  km	Financial  Rs million	Physical  km	Financial  Rs million
Terai	3400	2805	3400	2805	0
Hill	1950	4875	1428	3570	522	1305
Mountain	850	4250	318	1590	532	2660
Total	6200	11930	5146	7965	1054	3965

Major Rural Development Programs/Projects

There are a number of projects undertaken by the Ministry of Local Development in collaboration with local bodies i.e. DDCs, having major component of poverty reduction apart from transport infrastructure development. Important rural transport projects are as follows:   

§  GoN Funded Block Grant to DDCs, Annual budget (approx.)Rs 1 Bn, 42% of which is to be spent for capital formation in public works

§  GoN Funded Block Grant to VDCs,Annual budget Rs 8 Bn(approx.), 70% of which is to be spent for capital formation in public works

§  GoN Funded Block Grants to Municipalities Annual Rs 40 crore (approx.), 70% of which is to be spent for capital formation in public works

§  SDC Grant Funded (partial) District Road Support Program (SDC grant) in 6 districts

§  GoN Funded Local level and Agricultural Road  ProjectRs 1 Bn per annum in all districts

§  GoN Funded Remote and Special Area Development Program,Rs 10 Crore per annum in 25 remote mountain districts

§  DFID Funded Rural Access Program (DFID grant) GBP 17Million in 7 districts

§  WFP Food Grant Funded Rural Community Infrastructure Dev. Works, food for work  in 22 districtse

§  ADB loan funded Decentralised Rural  Infrastructure and Livelihoo  Project, USD 50 Million in 18 districts

§  WB Grant Funded Rural Access Improvement & Decentralisation Project, USD 32Million  in 30 districts

§  GoN Funded Rural Road Maintenance Fund

§  GoN/SDC funded Trail (Suspension) Bridge Construction and Maintenance Project (SDC grant) in  54 hill districts

§  ADB/DFID/OFID/HMG Funded Rural Reconstruction and Rehabilitation Sector Development project , USD 106.8Million in 20 districts

§  GoN funded Roads Board Fund Rs 25 Crore per annum for rural roads maintenance and ugrading.

§  Finland Grant/Nepal Funded Rural Village Water Resourced Management Project, Euro 11.4Million.

§  Findland Grant/Nepal Funded Rural Water Supply and Sanitation Project Western Nepal, Euro 9.7Million.

 The World Bank, The Asian Development Bank, UK's Department of International Development, Japan Internation Development Agency, Swiss Development and Cooperation, Finland, OPEC Fund for International Development, IFAD, UN World Food Programme are the major development donor partners in rural infrastructure development efforts of Nepal.

Helvetas, GTZ, are among the major International Nongovernmental Organisations who are facililation Nepal rural development.

WSP (British), SKAT (Swiss), ITECO (Swiss), Finconsulting Group(Finland), Ramboll (Finland) are the existing International consulting firms associated in rural infrastructure development consultancy business at present.

Nepal Rural / Agricultural Roads Technical Standards

Table 3.3

S. No	Design Parameters	Class ‘A’ District Road		Class ‘B’ Agri and Village Road
		Hill	Terai	Hill	Terai
1.	Design capacity- in both directions (Vehicle per day/T.U per day)	200 (400)	400 (800)	100 (200)	200 (400)
2.	Design speed (km per hour)	20	40	15	30
3.	Right of way, either side from the road center (m)	10	10	7.5	7.5
4.	Formation width (m) - includes 0.6 m drainage & 0.4m parapet which will be kept wherever needed.	5.0	6.0	4.0	4.5
5.	Carriageway width (m)	3.0	3.0	3.0	3.0
6.	Shoulder width, either side (m)	1.0	1.5	0.5	0.75
7.	Paving the earthen surface by	Broken stones or Gravel	Gravelling or Brick Soling	None	None
.	Minimum radius in horizontal curve (m)	10	20	10	20
9.	Maximum average gradient (%)	8	5	8	5
10.	Maximum gradient (%)	12	7	12	7

 

4.     Local Government Institutions

      Nepal has been divided into 75 adminstrative districts. Rural level Infrastructure development implementation is the local government's responsibility. There are three kinds of local government called Local Bodies in Nepal viz. District Development Committees(DDC) in 75 numbers, that of Village Development Committee(VDC) 3915 and that of Municipalities 58 as the lowest government units as of now. The physical infrastructures thus planned and implementation technology has to address appropriately Nepal's geo-eco-climatic engineering context.

      Nepal has now decided to opt for federal governance system from the present unitary one. It is estimated that perhaps more than a dozen provinces( federal states) will be constituted after a new constitution is promulgated by the constituent assembly.Likewise the number of districts will be obviously increased at least tenfold compared to the present 75 districts. New modern towns and cities are inevitable to develop in commensurate with the upcoming new political administrative structures.

5.  Potential and Prospect of engineering consulting opportunity

      Though having great potential of economic development, Nepal didnot /could not fare well thus far. Nepal can be categorised a virgin unexploied rich country for infrastructure development. With the seccess of the last democratic movement, there is great hope generated among the people of Nepal and a great opportunity is also entailing.Almost all big political parties have given emphasis and committed for the rapid economic development of the country.Physical infrastructure no doubt is a sin quo non for the economic prosperity.

      Following are some of the significant political commitments made by leading political parties:

• Development of East-West Railway transport through the Terai region parelleling east-west Highway.
• Development of Midhill East-West Highway.
• Development of Midhill East-West Railroad transport.
• Development of Kodari-Kathmandu-Pokhara-Lumbini Railroad transport.
• Development of at least 7 North-South Highways linking Indian bordering cities in the south to that of Chinese in the North.
• Development of Electric Tram on the Kathmandu valley Ringroad,.
• Development of Cable Car service along the foothill in the Kathmandu Valley and hill tourist spots uphill the valley mountain viz Shivpuri, Nagarkot, Daman, Palung, Kakani, Phulchoki and so on.
• Development of at least 7 Cable Car service linking religious centres, tourism centres to the cities and towns or market centres along the east west or other highways.
• Development of 5 Special Economic Zones.
• Development of new towns in Proposed New Provincial Headquarters.
• Develoment of new towns for the Proposed New District Headquarters.
• Development of Expressway linking Proposed International Airport at Nijgadh to Kathmandu.
• Development of 14 Industrial Development Estates Focussed to Indian Market in the South and Chinese Market in the North.
• Development of Multipurpose Water Resource Projects with tunnel technology daming rivers flowing in the midhill viz Kali Gandaki, Arun, Budigandaki, Seti, to Irrigate Terai's fertile land, develop hydropower and water navigation, transport and recreation.
• Development of all season rural roads in all districts.
• Development of other rural infrastructures such as micro hydros, micro irrigation, micro electricity projects throughout the country.

6.   Conclusion and Recommendation

Since the latest successful revotionary moverment which changed Nepal from a status of Kingdom to a republic Nepal, its political parties are now committed to take Nepal to fast development path. For, it needs huge finanacial resourses. Foreign donor community is also very much interested to assist by providing grant or loan aid in Nepal's endeavors.

Even if we manage to mobilise resources Nepal need relevant quality experts and expertises. Multinational company private sectors do have equally good opportunity to direct invest in Nepal. With this prospective investment boom domestic as well as international engineering consultancy firms will certainly have a great opportunity & a scope for doing a good deal of business here in Nepal in the sector of railroad, highways, hydro & renewable energy, cable car, industrial engineering and so on.

It is therefore equally important to lobby with their respective governments to assist in Nepal's priority areas such as this paper has highlighted above by the international consulting firms who are participating in this seminar. International consulting firms can also discuss with their respective government agency to prepare a package for expertise assistance required in different technological disciplines.

Entire world has now become ever more interdependent. Nations are assisting nations be it finanacial or technologically. Every one participating in the seminar representing different countries has got a great role in supporting Nepal's rapid rural infrastructures development. Helping Nepal by helping your government you will all help yourselves.Official Development Assistance policy must be, can be and should be supportive and benefitting to all concerned: investors, consultants and the receipient countries simultaneously.This politics should be one of the focus movement for international consultancy businessmen who are interested to do this business in Nepal.

A great potential and prospect of consultancy business opportunity is waiting in Nepal.

Introduction of the Author

Name:                          Bhim Upadhyaya

Position:                       Deputy Director General

Present Office:              Department of Local Infrastructure Development and Agricultural Roads (DoLIDAR), Ministry of Local Development, GoN

Education:                    BE civil Engineering from University of Roorke, India

                                    M Sc in Natural Resource Management, Pokhara University

Job Experience:

Worked for 2 year in Nepal Electricity Authority

Has been working with Ministry of Local Development for last 20 years responsible for planning, monitoring, coordinating donor agencies such as WB, ADB, DFID, SDC, ILO, Finland, Jica etc involved rural infrastructure development under the ministry of local development and through local bodies viz District Development Committees.