FROM ISSUE #68 (16 NOV 2001 - 22 NOV 2001) | TABLE OF CONTENTS
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The government has announced new expenditure regulations to tighten spending on projects. Finance Minister Ram Sharan Mahat says this is to eliminate one of the ?loopholes? in development administration, which has been a hotbed of corruption. The rule makes cost escalations beyond 15 percent through variation orders?changing designs and specifications mid-way into construction?illegal. One example of how specifications change is the Kali Gandaki hydroelectric project, which is expected to cost as much as 50 percent over the original budget by the time construction is over and the project comes on line sometime in early 2002. The new rules also simplify bidding for construction contracts, and specify that different officials are to do the cost estimates prior to bidding than those who eventually evaluate bids.