Driving Nepal deeper into debt

In the past three years, federal and provincial governments spent a massive Rs216.5 million on vehicles. If we add the budget allocated to vehicles this fiscal year, it adds up to more than Rs250 million, not including the budgets for cars of local governments and projects.

All three spheres of government are ignoring their own declaration to minimise expenses, and are wasting money on frivolous items. And the irony of it all is that the SUVs are driving along roads that are in advanced stages of disrepair because the money has all gone for expensive cars.

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Though the government has been slow to provide development and service delivery, vehicle-related expenses have grown six-fold since 2013. The federal government is the biggest spender: provincial governments accounted for just Rs20 million spent on cars in the past three years.

This fiscal year the federal government spent 2.45% of its development budget on vehicles. While it is perennially unable to fully disburse that budget, it spent four times more on vehicles than the amount allocated, even transferring money from other budget lines to do so.

“Using unspent development budget to buy vehicles is just an unnecessary expense,” says former government secretary Purna Chandra Bhatttarai. Other experts say that it is not just elected representatives, bureaucrats are also draining state resources.

According to the 56th report of the auditor-general, among the 800 vehicles in the 22 Singha Darbar-based ministries, only 622 are operational. Some are not being used even though they are in running condition — new vehicles are being bought before old ones are phased out. After an order from the PM’s office, 201 vehicles were handed over to various organisations this year, including many that were still in working order.

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“Buying new vehicles involves kickbacks, so the tendency to buy new vehicles is increasing,” says former finance secretary Rameshwar Khanal.

Four new Scorpios were bought for deputy attorney-generals last July, not because they were necessary but because the existing five-year-old vehicles were considered too old. At the end of the last fiscal year, 16 Scorpios were purchased for the chiefs of the House of Representatives and National Assembly, displacing 10-year-old vehicles.

The National Inclusion Commission bought five vehicles costing at least Rs4 million for its chief and 4 members. But to date the commission has only one member — the others have not yet been appointed. The vehicles are covered and stored on the office premises. Many other new commissions have already bought vehicles for their yet-to-be appointed members.

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According to the auditor-general’s report, there are 1,323 officer-level officials in the Ministry of Agriculture, and 1,577 vehicles in operation. There are 174 vehicles for 90 officers in the Finance Ministry and 151 vehicles for 94 officials in the Prime Minister’s Office (PMO). Many senior officials are accused of having separate vehicles for home and office use.

According to a guideline issued by the Finance Ministry, new vehicles should be bought only for newly-established organisations. Other offices should buy new vehicles only every 15 years. This guideline is considered legally binding, so ministries and other bodies are actually breaking the law. Only officials at joint secretary level and above are supposed to get vehicles, but today deputy secretaries and even junior officers are riding in government vehicles. Some officials have even acquired the habit of buying a new vehicle immediately after they are promoted or transferred.

Joint Secretary Binod Kunwar of the PMO says the office has made efforts to have an inventory of vehicles in working order, but hasn’t succeeded because of lack of cooperation from government entities.

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The Ministry of Finance does have guidelines on the capacity of vehicles that can be bought, but they are routinely ignored. Even money allocated to build public infrastructure is being spent on vehicles.

Repair and maintenance of vehicles is another area full of irregularities, including money being allocated for the upkeep of vehicles that have been in storage for years. Kunwar says the vehicles have become a long-term burden on the state.

The Ministry of Finance continues to dole out huge sums of money to keep officers happy, and the government has taken no steps to regulate it, despite the fact that the Finance Ministry has issued guidelines to reduce operating costs. This includes a rule that government vehicles should not have private license plates, but this is also ignored.

The government also has a policy of going electric, but continues to buy fossil fuel vehicles. Former Finance Secretary Rameswhor Khanal, who himself drives an electric Kia Soul, explains:  “There are fewer dealers of electric vehicles in the market, so there are less kickbacks in their purchase. Besides, you cannot make up fake bills of repair and maintenance of electric cars, which is why they are less popular.”