News Summary
- Internal conflicts within the Madhesh Province government and lack of budget coordination have led to the suspension of payments for development projects worth nearly one billion NPR.
- The Finance Ministry’s budget freeze in the budget system has put payments for 48 projects under the Ministry of Physical Infrastructure into uncertainty, causing unrest among contractors.
- Rupesh Singh, General Secretary of the Dhanusha Construction Entrepreneurs Association, expressed frustration over the payment halt at the end of Ashar, questioning the fairness of the government’s actions.
June 30, Janakpur-Dham – Just days remain before the end of Ashar month in the current fiscal year, yet the Madhesh Province government faces escalating challenges. Internal disputes and lack of coordination within the tripartite coalition administration continue to affect operations.
Currently, payments for completed construction projects are facing obstacles. Payments amounting to nearly one billion Nepalese rupees for 48 projects under the Ministry of Physical Infrastructure have been caught in a dispute.
The payment suspension occurred after the Ministry of Finance re-imposed budget restrictions within its expenditure system (PLIMBS), leaving payments uncertain. This has significantly impacted construction contractors and consumer committees.
With the payments for some completed projects halted in the final stretch of Ashar, contractors are under pressure. In response, they have prepared to lock the Ministry of Physical Infrastructure, where the Infrastructure Development Office has already been padlocked.
Rupesh Singh, General Secretary of the Dhanusha Construction Entrepreneurs Association, stated that the Madhesh government’s decision to freeze the budgets of dozens of projects has caused widespread tension.
“The ministry completed tender and other procedures to advance the projects. All legal formalities from our side were fulfilled. Now, to stop payments at the very end of Ashar after work completion, how justifiable is that?” he questioned sharply.
He added that frustrations with the government’s intentions and the resulting hardships faced by many contractors and consumer groups forced the lockout of the ministry.
According to the expenditure guidelines issued in Shrawan 2082 BS (July 2025), project implementation must proceed only after prior approval.
Until the end of Baishakh, the Ministry of Finance had kept the development budget frozen in the PLIMBS system. Some work resumed after the budget was released in the last week, including advances on certain projects.
However, towards the end of Ashar, the Ministry of Finance reversed course and reinstated the budget freeze, aggravating the payment issues.
Sanjay Kumar Sah, Deputy Secretary at the Ministry of Physical Infrastructure, explained that construction activities resumed only after the Finance Ministry lifted the freeze, but the re-imposition of the freeze caused the current problem.
“Work progressed only because the budget was temporarily opened; now that it’s suspended again, this situation has arisen,” he said.
The expenditure directives were issued when Sunil Yadav of the Nepali Congress was Finance Minister. The current minister, Yuvaraj Bhattarai, has emphasized that the instructions must be followed according to earlier decisions and cannot be changed or annulled without cabinet approval.
“The budget freeze has been in place according to guidelines issued 11 months ago. Prior approval is required to proceed with any project,” he stated, adding, “I suggest the cabinet should consider issuing a new decision.”
Meanwhile, internal disputes within the tripartite coalition are ongoing regarding this fiscal year’s budget freeze and spending cuts. On Jestha 26, the Finance Ministry issued a circular to freeze budgets for projects under 1 million NPR and to reduce expenditures by 30 to 50 percent on categories including fuel, provoking dissatisfaction among the Chief Minister, ministers, and staff.
Although the Council of Ministers meeting of Ashar 13 reversed the Finance Ministry’s decision and passed a different resolution, responsibility remains with the Finance Ministry. The proposal was not initiated by the Finance Ministry, and Minister Bhattarai’s absence at the meeting raised questions about the decision’s validity.
The tripartite coalition government is headed by Chief Minister and Nepali Congress parliamentary party leader Krishna Prasad Yadav, while the Finance Minister is Yuvaraj Bhattarai, leader of the Communist Party faction. Internal dissatisfaction continues to hamper the Madhesh government’s functioning.
