Key Infrastructure Projects

Nepal’s adoption of a three-layer governance system through decentralization has significantly enhanced provincial infrastructure development. By empowering subnational authorities, the federal structure allows for more dynamic and region-specific infrastructure projects, leading to substantial progress in areas like infrastructure development, drinking water supply, and sanitation. Previously marginalized regions such as Far-West and Karnali have benefited from this approach, with each province now having its own government and budget, improving inclusivity and distributing development benefits more equitably across the country.

The federal framework has also opened up numerous opportunities for provincial infrastructure development. Key projects include the creation of cross-border economic zones, industrial zones, and special economic zones, which are designed to stimulate trade, attract investment, and foster regional economic growth. Other initiatives such as industrial corridors, industrial villages, and tourism infrastructure aim to boost local industries, support small and medium enterprises, and leverage Nepal's natural and cultural assets for economic development.

Despite these advancements, several challenges hinder optimal infrastructure development. Provincial governments’ heavy reliance on central transfers limits their autonomy in decision-making, while poor execution of capital projects and inadequate institutional capacity further impede progress. Additionally, the lack of comprehensive laws and regulations creates difficulties for private investors. To address these issues, solutions include expediting the formulation of necessary laws, granting more decision-making powers to provincial governments, increasing central funding, and encouraging provinces to enhance their own revenue sources through local economic activities. Addressing these challenges will be crucial for ensuring continued progress and balanced regional development.

Note: This article is from Nepal Infrastructure Summit 2022 souvenir for more information visit our page https://nepalinfrastructuresummit.com.np/blog/key-infrastructure-projects