India Seeks Extension of Its Flagship Projects in Nepal

KATHMANDU: India has sought extension from Nepal for its flagship projects worth billions of rupees where New Delhi has directly injected funds with the receiving parties not required to go through official channels.

Among Nepal's numerous donors, India is the only one to enjoy such a facility and privilege where -- under a memorandum of understanding (MoU) first signed more than a decade ago -- the Indian embassy in Kathmandu can directly fund projects less than Indian 3 crore (over $500,000) for a single project on its own without any approval from the Nepal government.

According to a report published in Thursday's edition of The Kathmandu Post, the Indian embassy here made such a request very recently to Nepal's finance ministry seeking a three-year extension of the bilateral agreement that enables India to provide aid up to Indian 3 crore for each project through district development committees (DDCs) in Nepal.

The then government in November 2003, for the first time, gave such special privileges to India which was renewed in June 2006, August 2009 and August 2011.

The validity of the current MoU is until Aug 5, 2014. So far, India has funded 450 such small projects across Nepal injecting billions of rupees which is often criticised in Kathmandu as being used for creating patronage and loyalty in Nepal by the Indian establishment. India does not enjoy such facilities with any other country.

Nepal Maoist parties have been seeking cancellation of the agreement with India and have often instigated China to seek a similar facility.

A senior Nepal government official told IANS that the Chinese want to fund projects directly in some northern districts of Nepal bordering China under a similar arrangement with the Nepal government.