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Frequent poll deferrals cost Rs 4 billion to state coffer

The deferrals of the local elections time and again have incurred the nation an excess expenditure of over Rs 4 billion, it has been revealed. Election officers and security agencies who do not hesitate to take advantage of the situation for their own financial gains have also contributed to the exorbitant amount of the excess expenditures. -Bhadra Sharma: Centre for Investigative Journalism

Cij Nepal

July 10, 2017

<span style="color:#f00;">Frequent poll deferrals cost Rs 4 billion to state coffer </span>

The deferrals of the local elections time and again have incurred the nation an excess expenditure of over Rs 4 billion, it has been revealed. Election officers and security agencies who do not hesitate to take advantage of the situation for their own financial gains have also contributed to the exorbitant amount of the excess expenditures.

-Bhadra Sharma: Centre for Investigative Journalism

The Ministry of Home Affairs (MoHA) had initially estimated the security costs of holding local elections to be around Rs 7.5 billion. However, circumstances changed on April 26 when the government announced to hold the elections in two phases. They decided to hold the first round of elections in Provinces 3, 4 and 6 on May 14 and second round of elections in Provinces 1, 2, 5 and 7 on June 14. Following the government’s decision, MoHA on May 22 also decided to demand an additional amount of Rs 2.69 billion to the Ministry of Finance citing extended tenure of security personnel and officers deployed for the elections.

While the ministry was reviewing the file sent by MoHA requesting an increase in the budget, the government again rescheduled the second phase of local elections for June 28, two weeks later than originally scheduled. Yet again on June 15, a cabinet meeting of the government deferred the local elections in Province-2 and rescheduled it for September 18. Election calendar in Provinces 1, 5 and 7 were also revised, but without affecting the poll date of June 28. After the elections got deferred for the third time, the MoHA has again demanded Rs 3.6 billion in excess expenditure for security personnel and officers deployed by them to provide the election security. In total, they have now demanded over Rs 6 billion in the two counts.

The Ministry of Finance, however, has deducted some amounts to the demands of MoHA and released Rs 2.44 billion on July 2. The MoHA said the money was needed to compensate the government’s move to defer the elections by one-and-a-half months but stated that it is far from sufficient.

Speaking on condition of anonymity, a high level officer of the MoHA working at its Account Department, said, “This amount can cover wage allowance of temporary police hired for the elections security. However, the money is inadequate to cover all the facilities provided to Nepal Police, Armed Police Force (APF), police in mufti, and District Administration Offices.”

Although the first and second rounds of elections have been held successfully, Election Commission (EC) is still to hold polls in the last remaining Province-2 slated for the third round. The budget released by MoF does not include the elections cost of the third round. “We estimate the cost for holding the elections in Province-2 to be around Rs 1 billion,” said the source.

On the other hand, the EC also has its own array of expenditures. As the election body already has started preparatory works, they said pushing the poll date by one-and-a-half months have cost them ‘at least Rs 500 million’ in managing elections and extending tenure of its employees.

“Some employees had already claimed half of their allowances before being recalled due to election deferrals. We then had to provide them full allowances again for the same works,” said election Commissioner Narendra Dahal, justifying the excess expenditures of half a billion.

The heavy financial burden of hiring temporary police

On February 28, just a week before the candidacy registration day, the government decided to hold the elections in two phases. The decision came at a time when the EC had already completed all arrangements for the elections. Likewise, the MoHA, who has the main responsibilities of arranging security during the elections, was also working full-fledged to arrange the security. When all the preparations were made to hold the elections in just one phase, the multiple deferrals in the following days drastically increased the cost of security, election materials and employee deployments.

According to the MoHA, Central Security Committee had analyzed the overall security situation of the country in view with the government’s plan to hold the local elections in a single go. As per their analysis, 226,000 were immediately required. In order to meet the total requirement; 54,000 personnel were called from Nepal Police, 30,000 personnel from APF, and 1,000 from National Investigation Department (NID). Even after calling Nepal Army (NA) to fill in, the analysis concluded that 75,000 temporary police were required. Recruitment process of temporary police then began immediately.

At first, temporary police were recruited for 55 days tenure. However, their terms were extended twice due to the frequent poll deferrals. As of now, their tenure stands at 90 days, informed MoHA Spokesperson Deepak Kafle.

Temporary police that were deployed in Provinces 4, 5 and 7 have been retained even after elections in those regions were completed in the first phase. After the first phase elections, temporary police were being used for traffic management and providing security at exam centers, among others.

By June 14, MoHA relocated them in the southern plains as the government had planned to hold the second phase elections in that date. By the time preparations for the second polls reached the final stage, the government again deferred the elections in Province-2 just 12 days before the scheduled poll date.

According to Kafle, the ministry has not reached conclusion on what to do about temporary police deployed at Province-2. The expenses will increase further if the decision is taken to extend their tenure again. “The amount will easily reach Rs 1 billion if we add wages of 75,000 temporary police,” he added.

“We’ll provide the demanded budget”: MoF

The government has allocated Rs 17,230 per month for each temporary police. Besides the monthly wage allowance, each of them also received Rs 7,100 for uniform, Rs 1,000 as transportation cost to and from the deployed area, and a special 7-day allowance of Rs 250 per day during elections and Rs 250 per day as especial allowance.

A total of Rs 1.56 billion has already been spent in 35-day tenure extension of temporary police following completion of their first tenure on May 14, shows a financial record. Their seven-day special allowance and food allowance stands at around Rs 265 million.

Personnel of Nepal Police, APF and NID deployed for poll security receives an addition of 60 percent of their salary as an incentives. The financial figures reach even higher after adding their special allowance, food allowance and uniform costs, according to officials at MoHA.

“It would require an exorbitant amount of money just to provide 60 percent addition of their salary to security personnel of Nepal Police, APF, and NID who were deployed for poll security,” said the employee at MoHA’s, who spoke on condition of anonymity. “The further the election process prolongs, the more drastic the financial burden increases.”

The finance ministry had allocated a lump sum of Rs 19.27 billion for EC and poll security after the government announced election date. Among that, Rs 10.4 billion was set aside for EC while the remaining Rs 9 billion was allocated for security. The MoHA has been demanding excess amount for security after the allocated money turned out to be inadequate.

Acknowledging that MoHA has demanded additional amounts, Joint-secretary of MoF Ram Sharan Pudasaini said they are holding discussions regarding the budgets they can provide the MoHA for security. “Election is the priority of the country. It is not like road and irrigation projects. That is why we will provide the budget that has been demanded. If we could not meet the demand, we will seek other collaborative ways to make it available,” added Pudasaini, who is also Spokesperson for MoF

Despite demanding additional budget, the home ministry has not released details of their security expenses. The ministry’s officials only say that they are collecting details of the allocated sums and its expenses. According to them, the budget allocated in the first phase have been spent on fuel, information collection, training, daily allowance and purchase of security materials.

Under the security expenses, NA received Rs 930 million, out of which they said Rs 100 million was spent on purchasing communication equipments. The remaining amounts are said to be spent on daily allowances of their personnel deployed for election security and other facilities, according to an official at the Ministry of Defense. “NA has demanded additional budget. However, they have not released their expenditure details,” said the official. The ministry claimed that as many as 64,000 army personnel were deployed altogether in the first and second rounds of the elections.

The EC also recorded an increase in expenses following the frequent poll deferrals. “The EC had already opened offices of chief returning officers and election officers and deployed our employees before the government announced the elections in two phases. However, the government deferred the elections at the last moment, turning all our incurred expenses futile,” said Surya Prasad Sharma, Spokesperson for EC.

According to him, the election body had set up offices of the chief returning officers in all 75 districts and deployed 11 employees in each of the office before the poll deferral. Likewise, election offices were also set up in each of 744 local units, where 9 employees were deployed in each of the office.

“Before the election deferral, we had already spent over Rs 80 million in opening the offices and Rs 230 million in deploying the employees. We recalled 461 local level employees following the government’s decision but their deployment expenses turned out to be fruitless. However, we couldn’t shut the offices, which contributed to the increase in expenses,” lamented Sharma.

Former Chief Election Commissioner Neel Kantha Uprety also voiced that dividing a single phase elections into three phases increased the expenses. “Likewise, additional allowances have been arranged for employees. It also has significant contribution in increasing the election costs.”

Employees deployed by the EC are provided additional allowance of their salary’s 121 percent as well as Rs 500 – Rs 700 daily food allowance depending on the employee’s rank. The EC has already spent over Rs 5.55 billion as election expenses. However, that expense does not include vehicles and election materials provided by Nepal’s friendly nations.

Out of the total expenses, it is said that over Rs 3 billion were spent only on management of the employees. They still have not cleared the dues of Rs 250 million altogether owed to Janak Shiksha Samagri Kendra Limited for ballot papers printing and other logistics suppliers. EC spokesperson estimates that holding all phases of the local elections would cost them staggering amount of about Rs 7 billion.

The EC is yet to hold the elections in Province-2, which would be held under third phase on September 18. Had the government made it clear from the beginning that the local body elections would be held under three phases, such an exorbitant amount of expenditures would not have been necessary, officials of the EC claimed.

“Firstly, there would not be need to hire such a large number of temporary police for elections in multiple phases. Ordinary police personnel would have been sufficient,” Election Commissioner Dahal said. “Likewise, we would not have needed to spend so much in purchasing election materials had the government clarified their motives to hold local body elections in multiple phases.”

According to him, the EC had to buy 29,000 ballot boxes at the rate of Rs 3,260 each in a short notice as per the government’s earliest declaration to hold elections in a single phase. The same ballot boxes that were used in the first phase elections could have been transported to other regions during the second and third phases. The government could have saved Rs 90 million of taxpayers’ money in ballot boxes alone.

Likewise, purchase of low quality election materials have also added to the cost. According to an employee of the EC, the commission had decided to purchase red ink after the first phase of elections as “the blue ink used in the first round elections created problems in counting ballot paper of the same color”. However, the red inks turned out to be of substandard quality. Sources said the use of the substandard ink for stamping completely rendered ballot paper invalid as the ink spreads around.

Multiple sources have accused EC’s former secretary Gopinath Mainali for the substandard purchase. “We all decided to purchase red inks, but Mainali purchased very low quality inks that would bring setbacks to the elections if used,” said an election officer. The source informed that Mainali incurred Rs 3.2 million by purchasing the substandard inks.

The rising cost of democracy

Following the uprising against monarchic autocracy in 1990, the country’s first multiparty election was held in 1991. The EC had spent Rs 110 million to hold the legislative election of 1991, according to ‘Election Cost in Nepal’, a book written by current Chief Election Commissioner Ayodhee Prasad Yadav. Likewise, another legislative election in 1994 cost the EC Rs 240 million, an increment by 122 percent. Similar election was held in 1999 with the total cost of Rs 360.6 million.

The cost drastically increased while holding the first Constitution Assembly (CA) election of 2008, where the election body spent Rs 2.9 billion rupees. Likewise, the second CA election of 2013 was held with the budget of Rs 4.26 billion, excluding security costs, according to former EC officials.

Compared to the past election costs, the EC has already spent about Rs 6 billion (including Rs 250 million it owes to JSSK and other suppliers) before completing the final phase of the local body elections. Not just the frequent election deferrals, multiple obstacles in election related works in including vote counting process of various local units have also contributed to even more expenditures.

The EC has abused rights and authority given by the constitution, resulting in massive financial burdens to the state, a report of Auditor General released immediately after second CA elections mentions. Regarding how the expenses have increased, the report reads, “The EC cannot provide additional benefits to its employees for everyday works such as collecting voters’ list with photo. However, the election body has been listing its everyday works as election-related works even when there are no apparent works regarding elections. Such abuse of power with sole motive to claim additional benefits has resulted in heavy financial burden to the state, and hence, should be stopped immediately.”

Allowances, rental incomes and vehicles

According to a highly placed source at the EC, there is a provision under which commissioners attending a meeting for election purpose receive Rs 2,000 per meeting, while secretary and joint-secretary receives Rs 1,500 and Rs 1,000 respectively. “Officials receive allowances while participating in election related meetings. That is why, during final days of the election preparations, as many as 10 meetings are held in a single day.”

An official of the EC confirmed the claim and admitted that chief officers and officers of the election body also receives ‘meeting allowances’ along with salary and various other allowances. The official further said, “We get less amount of allowances compared to officials of higher ranks. Commissioners of the EC sometimes attend as many as 10-15 meetings in a day. Even if they don’t attend the meetings, they just sign in the attendance and receive the allowance.”

The clause 38 of Election Commission Act 2017 states that “EC can directly purchase the goods and services from market if it is not possible to call the public tender during elections.” This very legal provision has allowed the EC to bypass Public Procurement Act, which is why election officials, commissioners, and politicians attempt to purchase maximum logistics during the election calendar.

Purchase of electronic voting machine to ‘digitalize’ the elections is an example of it. Necessary electronic voting machines (EVMs) can be purchased during normal times through normal process. However, attempts to purchase EVMs only during election calendar shows that there are hidden interests of the election officials and politicians alike. This time, the attempt to purchase EVMs from UK-based ‘Smartmatik Company’ did not succeed due to conflicts among commissioners.

Benefits taken by EC officials have also come into controversy frequently. For instance, CEC Yadav and Commissioner Ila Sharma both owns house in Kathmandu, but they both have been accused of taking Rs 18,000 monthly from the EC as rental allowance. The matter was brought to light by former election secretary Mainali, who was recently transferred from the EC. Mainali has claimed that he was insultingly transferred just five days before the elections after attempting to prevent unnecessary expenses in rental allowance and also for suggesting ways to minimize the costs for the EC.

Commissioner Sharma has claimed that her house was destroyed by the quake and has since been living in her relative’s home. “Secretary Mainali spread rumors without understanding my plights. I don’t have home and I am tired of shifting rental homes constantly. That is why I’m staying at rent in my brother-in-law’s home. Anyone can come and take a look at the place I’m staying at,” she defended.

Aside from this, all five EC commissioners have been provided with two vehicles. However, the two vehicles have already been proven insufficient as the EC recently took decision to provide a brand new Prodo vehicle to each of its commissioners. However, the purchase process has not been able to move ahead as MoF is yet to approve the application.

As budgets are easily available and Public Procurement Act can be bypassed during election preparation periods, officials from EC to security bodies choose this time to make big purchases. For instance, the MoHA also had proposed to purchase 1,000 vehicles immediately after the government declared the poll date. However, the MoF rejected the application stating that the same numbers of vehicles are provided by donor countries during every election.

A person with knowledge on the country’s election issues said. “As our legal provision renders Public Procurement Act unattractive during elections, officials fold their sleeves to take full advantage of it. They collaborate with businesspersons and commercial companies for mutual benefits while misusing funds from the state’s coffers.”

“Huge amounts of money could be saved if officials of the EC perform their duties honestly instead of looking to fulfill their selfish financial gains. But unfortunately, we do not see the possibility of such a situation at the moment.”