Investment with efficiency key to economic growth: FM
Finance Minister Ram Sharan Mahat has asked to increase efficiency in investment to get more yield.
Addressing Samana banking prize ceremony organised by Samana Banking Prize Trust in the capital here today, he said that the projects’ cost has escalated due lack of efficiency. “The cost of Chameliya Hydropower went up beyond the original estimate due to inefficiency,” he said, adding that though it costs only around Rs 150 million per megawatt (MW), the cost of energy produced by Chamelia is going to cost Rs 500 million per MW.
Frequent labour strikes, lack of adequate infrastructures and red tape have further escalated cost apart from delaying it. Delays also increase the cost of projects, he added. ““Increase in the cost of projects ultimately hits consumers.”
To reduce the cost of doing business, the country will see another phase of economic reforms, Mahat said. “Private sector efficiency also rests on the cost-effectiveness of doing business.”
Claiming that the government is promoting investment-friendly environment to attract foreign investment, Mahat said that improved security, prompt decision making, policy stability and construction of physical infrastructures are key to investment. “New possibilities and opportunities have opened up in the hydropower sector.”
Reminding that the European Investment Bank (EIB) has committed $225 million investment in four projects – Tanahu Hydropower, expansion of Marsyangdi corridor, Kaligandaki corridor and Trishuli corridor – he said that the International Finance Cooperation (IFC) has also committed $6 billion investment in the energy sector. “The banking sector is also ready to fund development projects as they have more than Rs 70 billion liquidity currently. However, the banks and financial institutions should merge and become stronger.”
He also said that the country needs to achieve a high growth rate at least for coming 10 years to be ranked as a developing country as it has recorded a very low growth for the past decade.