Infrastructure sector tops budget allocation for new fiscal year

Nepal's physical infrastructure and transport sector has secured the highest budget allocation for the upcoming fiscal year, receiving Rs3.02 trillion, representing 14.25 percent of the total budget. This significant funding is earmarked for roads, urban infrastructure development, and water supply and sanitation projects. The newly merged Ministry of Physical Infrastructure and Transport is prioritizing national pride and strategically important projects.

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procurement reforms, flexibility in fund transfers, alternative financing mechanisms, and ensuring project stability will help complete projects on time and within budget under a “mission mode” approach.

However, the budget includes a reduced allocation for the highly anticipated Kathmandu-Tarai Madhesh Fast Track, with Rs17.64 billion designated for its construction phase, down from Rs24.49 billion in the current fiscal year. Finance Minister Swarnim Wagle outlined a "mission mode" approach to project completion, emphasizing procurement reforms, flexible fund transfers, and alternative financing mechanisms. A "sunset law" for development projects is also slated for presentation to Parliament.

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a “sunset law” related to development projects will be presented in Parliament within the current fiscal year.

Contractors facing difficulties due to rising costs of fuel and construction materials, exacerbated by the conflict in West Asia, will receive price adjustments. The Nepal Construction Entrepreneurs Federation welcomed this, noting that price adjustment was a key demand. The budget also focuses on completing ongoing national pride projects, such as the Sunkoshi Marin Diversion to irrigate 122,000 hectares and developing agricultural and industrial corridors. The government aims to blacktop 1,000 km of roads and construct 275 bridges, targets considered achievable based on past performance.

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the budget appears to prioritise completion of old projects.