In Koshi Province, DPRs worth millions for projects never to be built

On October 3, 2024, the Koshi provincial minister for physical development Bhupendra Rai organised a press conference and announced that there have been widespread irregularities in the name of detailed project reports (DPRs).

This may have been Rai’s attempt to distinguish his government from the previous one but when we analysed records, the new minister’s claim was not too far off the mark.

According to details made public by Rai, many DPRs were not even on record. As many as 13 offices under the ministry have prepared 784 DPRs between the fiscal years 2075/76 and 2080/81. Of which, 308 haven’t moved ahead for implementation. Meanwhile, there is not even a record of 104 of them.

The province’s physical infrastructure development ministry had prepared a DPR in fiscal year 2076/77 to construct a ministerial residence. The DPR was prepared at the cost of Rs. 1 million 275 thousand but by then the land for the building site was yet to be fixed. This flouts the Public Procurement Regulations 2064, which states that all work for the construction should move forward only after fixing the site. Five years after the DPR was prepared, the building site is yet to be finalised. “That project remained only on paper,” Rai, the minister, says.

Between Asar 20-24 in the fiscal year 2074/75, the physical infrastructure development ministry ordered the preparation of as many as 20 DPRs. Then it tasked a single company—Slab Consultant based in Sanepa, Lalitpur—with preparing 11 such reports.

Of those 11, only two bridge projects—one connecting Letang-3 and Letang 2, and another above Lohandra stream—have been constructed. The ministry had spent a total of Rs. 1 million 972 thousand for the 11 DPRs.

Corruption of huge proportions seems to have been perpetrated at a time when the provincial government was just formed and was yet to get institutionalised. Minister Rai said there have been widespread irregularities in the name of DPR formation over five years since the government’s formation. In many cases, a simple survey report has been billed as a DPR.

The Auditor General’s report states that the ministry spent Rs. 320 million 96 thousand for DPRs in six fiscal years between 2074/75 BS and 2079/80 BS.

According to Ashok Kumar Sah, the ministry’s secretary, if all the DPRs were to be implemented, it would require a budget of hundreds of billions.

Koshi Province’s (then Province 1) first government was constituted on 13 February, 2018 in the leadership of Sherdhan Rai. Ambirbabu Gurung was the state minister of physical infrastructure development then.

It has been found that the DPRs were prepared by consultant companies run by Binita Tamang, the wife of chief minister Rai’s personal secretary Makar Khadka, and Rajeev Katwal, an assistant of state minister Gurung.

Katwal, who himself is an engineer, had tasked Interface Engineering, Kathmandu with preparing the DPRs. According to data from Physical Infrastructure Development, this consultant company had presented a master plan for Nishankhe drainage project in Okhaldhunga on Jestha 21, 2078 BS and for Ghunsa Taplejung project on Asar 3, 2078 BS. But these DPRs haven’t been moved forward for implementation yet. The ministry had spent Rs 2 million 52 thousand to prepare these two DPRs. According to Ramesh Kumar Shrestha, chief of the ministry’s infrastructure department, a consultancy can only work for amounts worth Rs 1 million in a fiscal year.

Khadka, the personal secretary, however, claims that he has no involvement in DPR preparation. “I might have asked some friends to apply, but I have no involvement in this,” he said.

Khadka’ wife, Binita Tamang, is also an engineer and the manager of Finer Engineering Consultancy. She admitted to having worked in coordination with the provincial government. “Three of us had come together to run a consultancy,” she said. “And we had worked on some projects in coordination with the provincial ministry.” Their consultancy had prepared a DPR for the Andherighat-Thulodumma-Manedanda-Tiwaribhanjyang road section in Bhojpur on 8 July 2020 at the cost of Rs 1.5 million 79,985. But the project has not moved ahead yet.

Ministry officials say that they had worked through consultancies of their accomplices to bypass the rule mandating a company can only work for Rs 1 million in a fiscal year. “We would receive calls from then chief minister and his secretariat about tasking certain companies with the DPRs,” an official at the ministry said. “Because we were new to the ministry, we couldn’t raise our voices.”

What the data says

According to the Auditor General’s report, the ministry spent Rs. 35.3 million for preparing DPRs of roads, bridges, river control, view towers, drinking water and irrigation projects, and suspension bridges in the fiscal year 2074/75 BS. The ministry had a total budget of Rs 140 million that year.

The Auditor General’s report had said then that since the ministry has not ensured the budget and construction for the projects for which DPRs have been prepared, there's a slim chance the investment on consultancy work would be utilised.

But this trend of expense on DPRs didn’t stop another year. In the fiscal year 2075/ 76 BS, as much as Rs. 18.9 million was spent on DPRs of 25 projects. And the DPR work was carried out flouting existing rules, without inviting competition among bidders.

The ministry hasn’t even kept a record of many such DPRs that neither guarantee the budget, construction timeline and process.

In fiscal year 2076/77 BS, the ministry and its offices spent Rs 16.9 million in DPRs. That same year, the Infrastructure Development Office Jhapa paid Rs 23 million 613 thousand and Infrastructure Development Office Okhaldhunga Rs 16 million 482 thousand.

In fiscal year 2077/78 BS, as much as Rs 11.9 million was spent on preparing DPRs for drinking water and smart city projects. At the time, the Energy, Drinking Water and Irrigation and Physical Development ministries were a single entity. That year, the Infrastructure Development Office Morang had spent Rs 21 million 843 thousand in preparing DPRs from 21 consultancies.

The Auditor General’s report for fiscal year 2077/78 BS says this about DPR implementation, “While the ministry has prepared 131 DPRs and study reports since fiscal year 2074/75 BS, it hasn’t revealed the status of their implementation and hasn’t updated their records. The trend of only preparing DPRs and studying the possibilities of projects has rendered investment unproductive. The ministry should prepare DPRs on the basis of need, worth and utility and reduce expenses.”

The Auditor’s General office has also asked the ministry to clarify why it can’t use human resources from its own office and has also suggested to control outsourcing DPRs.

But ignoring its suggestion, the infrastructure development offices in Sankhuwasabha and Udaypur under the same ministry (later renamed Road Infrastructure and City Development ministry) and the city development and building office in Morang spent Rs 9 million 920 thousand to prepare DPRs for 13 projects.

This trend didn’t stop there. In fiscal year 2079/80 BS, three offices including infrastructure development offices in Sankhuwasabha and Okhaldhunga, and city development and building office Okhaldhunga spent Rs 67 million 221 thousand to prepare DPRs for 39 projects.

While hundreds of such DPRs are being shelved, the offices have allocated a budget in the current fiscal year to prepare DPR for 59 projects.

The ministry hasn’t yet provided the details of the expenses incurred while preparing DPRs. It is also not uncertain just how much of a cost it would require to complete the projects whose DPRs are done.

In an earlier press meet, ministry Bhupendra Rai had said that as many as 784 DPRs have been prepared since the provincial government was formed. But according to data received by CIJ, as many as 699 DPRs were prepared and of them 307 were not implemented yet.

Meanwhile, the then information office Mitramani Niraula of Infrastructure Development Office Morang had said that it couldn’t provide details of over 10 DPRs prepared under it as they have now disappeared.

The Infrastructure Development Office Okhaldhunga also didn’t provide details about DPRs under various pretexts. Minister Rai had said that of the 47 DPRs it had prepared, only 8 were in the process of implementation.

Even according to the incomplete information CIJ received from the ministry and its offices, it costs over Rs 40 billion to implement the DPRs prepared between fiscal years 2074/75 and 2079/80 BS. This is Rs 5 billion more than the total budget allocated for the provincial government in the current fiscal year.

DPRs being prepared by flouting rules

A DPR is a document that includes complete information about a project: the importance and worth of a project, its cost-benefit analysis, its technical analysis, environmental assessment, and legal analysis, among others. This has been codified in the provincial working procedure related to project selection and categorisation 2080.

The procedure also includes details about the infrastructure that a province can build. While constructing road infrastructure, the maximum cost should not exceed Rs 1 billion. But the provincial physical development ministry has prepared DPRs for projects worth over Rs 4 billion 640 million. The DPR for the Dharan-Mulghat tunnelway prepared at the cost of Rs 1.5 million has estimated project cost at Rs 4 billion 620 million.

Likewise, the DPR for the Koshi Refreshment Centre puts the project’s estimated cost at Rs 2 billion 580 million. Now, while as much as Rs 330 million has been already spent for the project, there are efforts to grant it to the private sector, according to Rebatiraman Bhandari, Koshi province’s minister for law and internal affairs.

“Projects other than those involving infrastructure development should have a minimum cost of Rs 5 million,” the working procedure states. “For projects of long-term importance and provincial pride projects, cost can go up to Rs 1 billion considering the budget and resources.”

The procedure also mentions that DPR works can be moved ahead only after permission from the ministry concerned and the provincial planning commission.

Damodar Khatri, Koshi provincial financial comptroller general, says that the direct purchase provision in the Public Procurement Act has been abused.

“The provision is in place to reduce cost but it has been manipulated,” he said. “If the DPRs were prepared through bidding, nobody would raise a question. But here, there is nepotism in DPR preparation.”

He further said the fact that a single firm has been tasked with preparing DPRs repeatedly in a single fiscal year and the lack of their implementation has raised suspicion of political collusion.

Luring the voters and taking commissions

While presenting the budget for the fiscal year 2075/ 76, the then minister for economic affairs and planning, had announced that a feasibility study for at least two ‘smart cities’ would be carried out and a budget was earmarked for that.

A budget of Rs 10 million was earmarked for the purpose. According to the plan, a feasibility study for the smart cities was carried out but the work for the project hasn't started yet.

Mohan Kumar Khadka, the then member of provincial assembly, alleges that many DPRs are prepared inside closed doors for commissions. Another former assembly member Upendra Ghimire too says there’s been large-scale corruption in the name of DPRs.

Purna Laksham, former chair of Koshi province planning commission, also alleges that DPRs have been used to provide jobs to cadres. “DPRs are prepared without establishing credible economic sources,” he says. “Cadres of many political parties are involved in this. Preparing DPRs without ensuring investment for the project is misusing state money.”

He further says that DPRs are prepared without analysing the proposed projects’ potential impacts on society and benefits to the people.

The then state minister for physical infrastructure Ambir Babu Gurung, however, says that DPRs were prepared only after a field visit to the proposed project sites. “All the DPRs prepared during my time have been implemented and the projects are under construction,” he said. “There were no irregularities while preparing DPRs.”

Published in Ratopati on 29 January 2025