Govt cannot provide money to pay contractors through non-budgetary measures: MoF

Kathmandu / Dec 10: While the contractors have been struggling to receive payment from the government for the work they have already completed, the Ministry of Finance (MoF) has refused to pay them through cash transfer.

According to the contractors, the government is yet to settle their dues worth Rs 40 billion. They blamed the government for failing to implement the nine-point agreement signed in August-end.

Roshan Dahal, general secretary of the Federation of Contractors’ Associations of Nepal, said they have not received payments for the works accomplished in the last fiscal year.

“We were affected by the increased costs of the construction materials and fuel prices in the aftermath of Russia-Ukraine last year. On top of that, we did not receive the amount for the price adjustment committed by the government,” Dahal said.

On the other hand, the MoF wrote to the federation stating that it would be unable to provide an additional amount as per the commitment. Showing the cause of mounting pressure on the state treasury amid slow revenue collection, the apex financial institution of the government has expressed its inability to provide an amount in excess to the budgetary allocation.

“In regards to the various letters forwarded by the Ministry of Physical Infrastructure and Transport demanding additional funds for the maintenance and upgradation work of various construction-related projects, the government is unable to manage budget as it has to abide by the amount defined in the budgetary framework,” reads the MoF’s letter.

The government has been reeling under the financial crunch to meet its daily financial liabilities due to the surging government expenses and slow revenue collection. The records with the Financial Comptroller General Office show that the government, as of Friday, collected only 22.88 percent (Rs 325.54 billion) of the annual revenue target of Rs 1.422 trillion for the current fiscal year. On the other hand, the total expenditure stood at 24.68 percent (Rs 432.27 billion) out of the total budget of Rs 1.751 trillion.

Dahal urged the government to assure contractors that they will not face any action in cases related to check bounce, not to seize the bank guarantee in case of delay in payment of bank installment and to provide them respite in the issues related to the excessive surge in premium of insurance. “We will be forced to go into nationwide protests if the government moves to suppress contractors without introducing measures to address our grievances,” he added.