Finance Ministry Under Pressure to Secure Funds for Reconstruction of Damaged Government Infrastructure

Nepal’s next finance minister, set to serve under Prime Minister Sushila Karki’s cabinet, will inherit an economy grappling with fear and uncertainty. Key tasks include restoring private-sector confidence and mobilising substantial resources to rebuild government facilities destroyed during the violent protests of September 9.

The scale of destruction poses an extraordinary challenge. Even under normal conditions, the Finance Ministry struggles to meet revenue targets. Reconstructing government offices gutted by arson and vandalism will demand resources far beyond the current federal budget’s emergency reserves.

According to ministry officials, no significant allocation had been earmarked for such unforeseen damage. Only a minimal contingency fund exists, creating immediate fiscal strain. Singha Durbar, the country’s primary administrative complex, suffered heavy damage, including the Prime Minister’s Office. Other affected sites include the Federal Parliament building in New Baneshwar, the Supreme Court, and the Office of the President, the Ministry of Health, the Department of Roads, and the Department of Transport Management.

The Finance Ministry itself was not spared. Initial assessments report the total destruction of 14 Inland Revenue Offices and five Customs Offices, with partial damage to four additional revenue offices and four customs posts. The fully destroyed revenue offices are located in Damak, Itahari, Biratnagar, Lahan, Janakpur, Simara, Hetauda, Birgunj, Butwal, Bhairahawa, Nepalgunj, Dang, Dhangadhi, Dadeldhura, and Pokhara. Partial damage occurred in Krishna Nagar, Dhulikhel, Ilam, and Sindhuli. Customs offices in Mechi, Bhadrapur, Bhairahawa, Kailali, and Janakpur were completely destroyed, while those in Biratnagar, Nepalgunj, and Bhairahawa sustained partial losses.

Finance Ministry spokesperson Tanka Prasad Pandey said current funds can cover immediate repairs to keep essential services running, but full reconstruction will require a separate budget. “The budget did not anticipate damage of this magnitude,” he explained. “We will assess the total requirement once complete reports arrive. For now, maintaining services is the priority, and necessary resources will be mobilized immediately.” Offices with minor damage will operate using their own budgets, he added.

Pandey noted that rebuilding will occur in phases, reducing the need for large upfront financing. If domestic resources prove insufficient, donor assistance could be considered, though clear justification would be required.

Former finance secretary Rameshore Khanal, however, cautioned that external aid may be difficult to secure. “This is not a natural disaster or a pandemic,” he said. He argued the current crisis carries a message of zero tolerance for corruption and crony capitalism and expressed confidence that the economy will rebound, as remittances, agriculture, and tourism remain largely unaffected.

Another former finance secretary, Suman Prasad Sharma, emphasized that the immediate priority is accurate damage assessment and resource mobilization. “If needed, a donor conference similar to the post-earthquake effort may become necessary,” he suggested.