19-25 June 2015 #763

Friends in need

Plans for disbursement of home rebuilding grants and loans face obstacles
Sahina Shrestha

Cartoon: Diwakar Chettri

Nearly two months since the earthquake on 25 April, Nepal faces a gigantic challenge in finding an efficient and leak-proof way to support the reconstruction of the estimated 800,000 houses, schools, health facilities and monuments that were destroyed.

Not only is the scale of the destruction vast, but the rebuilding has to be done through a creaky and corruption-ridden government system. Also, many survivors are already faking home ownership papers to claim emergency reconstruction grants. Local government officials have been threatened in some places when they refused to include ineligible families in the list of those who lost homes.

The government has set up the National Reconstruction and Rehabilitation Fund (NRRF) with an initial target of $2 billion, and has deposited $200 million in it as seed money. The draft report on Post-Disaster Need Assessment (PDNA) conducted by National Planning Commission (NPC) has put the estimated recovery cost for the country at $6.66 billion.

“The results of the Post-Disaster Needs Assessment show that reconstruction will be costly and time-consuming,” said Johannes Zutt, World Bank Country Director for Nepal in a statement. “To raise the money needed, there must first be clear plans on how it will be spent.”

And a clear plan is exactly what is still missing from the government’s strategy. While Nepali officialdom will be presenting its case for more aid from the international community at a donor conference next week, it hasn’t yet been able to allay their concerns about the modality of disbursement, accountability and transparency.

Government officials say they are aware of donor apprehension and are working to assure them that systems will be in place to ensure reconstruction money will be properly spent.

“Rebuilding can’t be done overnight, and planning for it takes time,” Ram Sharan Pudasaini, joint-secretary at the Ministry of Finance, told us. “It isn’t like search and rescue which is immediate and tangible. We need proper assessment, decide on priorities, raise funds and then spend it efficiently. We are working on those plans now.”

The government is currently distributing emergency financial assistance of Rs 15,000 to each family which lost its home to make temporary shelters. It has also announced a home rebuilding grant of Rs 200,000 for those who wish to rebuild their houses on their own. Such families will also be eligible for subsidies or soft credit.

The NPC’s vice-chairman, Govinda Raj Pokhrel, said the government is preparing a detailed plan on the modality of disbursement for reconstruction: “We are working with financial experts, civil society and our development partners.”

He added that the Rs 200,000 will be provided in installments to eligible families who want to rebuild their homes. “The families will have to strictly follow the standard norms and building codes set by the government and the money will be distributed during various stages of rebuilding after monitoring,” Pokhrel told Nepali Times. People receiving the assistance will also have to follow one of the 12 model house designs being sent out by the government. A separate mechanism for financial monitoring is being worked out to make it tamper proof.

However, given the reported irregularities in even the distribution of Rs 15,000, there are many who question how honestly the rebuilding grants will be disbursed. It’s not just delays and corruption that experts are worried about, fake home ownership papers are already being used to claim compensation. VDC secretaries are being pressured and threatened by powerful individuals with political protection to certify people as victims.

The government has directed Chief District Officers to take action against fraudulent victims claiming ID cards, but that is hardly a deterrent. Lack of proper monitoring has already hindered relief assistance from reaching the actual victims.

Nepal Rastra Bank has worked out the procedure and issued circulars to banks to provide soft loans to homeless families who don’t own another house. Those living in the Valley will additionally get loans of up to Rs 2.5 million and those outside Rs 1.5 million at an interest rate of 2 per cent.

The money will be disbursed in installments and families will have to present recommendation letters from VDCs or municipalities. The banks will provide loans only to creditworthy families with collateral. To ensure repayment, the NRB is pushing for loan guarantees through the Deposit and Credit Guarantee Corporation.

Read Also:

Trouble in the rubble, Editorial

Braving the monsoon, Anurag Acharya

Moving out of darkness together, Sanduk Ruit

25 June Donor Summit, Om Astha Rai

We need help to rebuild Nepal, Interview

A more responsive state, David Sheddon

Needed: A Marshall Plan, Editorial

Guess who’s coming?

With only a week left for the 25 June donor meeting, Nepal’s authorities coordinating the conference, which aims at securing foreign assistance for rebuilding of the earthquake-devastated country, are desperately waiting for confirmation of participants.

Nepal’s closest neighbours India and China have not yet confirmed who is attending although there are unconfirmed reports that India’s External Affairs Minister Sushma Swaraj is coming. Nepal is also waiting for the final list of guests from the US, the UK and other European countries.

Early this week, Finance Minister Ram Sharan Mahat went to New Delhi to officially invite Indian Prime Minister Narendra Modi on behalf of Prime Minister Sushil Koirala. But Modi is unlikely to attend.

“India has not confirmed anyone’s name as yet,” said Narayan Dhakal at the Ministry of Finance who is involved in conference planning. “We are also waiting for a confirmation letter from China.”

Nepal has invited 62 donors – 37 governments, 22 international organisations and three ‘celebrities’: former US President Jimmy Carter, Hollywood actor Leonardo Dicaprio and British film star Joanna Lumley. But only 13 donors have confirmed their participation in the meeting to be co-hosted by Japan.

Norway’s Foreign Affairs Minister Børge Brende, Japan’s State Minister of Foreign Affairs Yasuhide Nakayama, Sri Lanka’s Disaster Management Minister A. Abdul Hameed Mohamed Fowzie and Bhutan’s Finance Minister Namgay Dorji have been confirmed.

The World Bank’s Vice President for South Asia Annette Dixon, European Union’s Development Commissioner, JICA’s President Akihiko Tanaka, ADB President Takehiko Nakao and UN’s Under Secretary General Gyan Chandra Acharya have also confirmed their participation. UN General Secretary Ban Ki-moon will not attend but will send a video message urging the world to help rebuild Nepal.

Read also:

25 June Donor Summit, Om Astha Rai

We need help to rebuild Nepal

Modi unlikely to visit Nepal