Frequent poll deferrals cost Rs 4 billion

July 10, 2017

Bhadra Sharma, Republica Daily ,10 July 2017 

The deferrals of the local elections time and again have incurred the nation an excess expenditure of over Rs 4 billion, it has been revealed. Election officers and security agencies who do not hesitate to take advantage of the situation for their own financial gains have also contributed to the exorbitant amount of the excess expenditures.
KATHMANDU, July 10: The Ministry of Home Affairs (MoHA) had initially estimated the security costs of holding the local elections at around Rs 7.5 billion. However, circumstances changed on April 26 when the government announced to hold the elections in two phases. The government decided to hold the first round of elections in provinces 3, 4 and 6 on May 14 and the second round of elections in provinces 1, 2, 5 and 7 on June 14. Following the government's decision, MoHA on May 22 decided to demand an additional amount of Rs 2.69 billion from the Ministry of Finance (MoF) citing the extended tenure of security personnel and officers deployed for the elections.

While the MoF was reviewing the file sent by MoHA requesting an increase in the budget, the government again rescheduled the second phase of local elections for June 28, two weeks later than originally scheduled. Yet again on June 15, a Cabinet meeting deferred the local elections in Province 2 and rescheduled it for September 18. Election calendar in provinces 1, 5 and 7 were also revised, but without affecting the poll date of June 28. After the elections got deferred for the third time, MoHA has again demanded additional Rs 3.6 billion for security personnel and officers deployed by them for security during the elections. In total, they have now demanded over Rs 6 billion in the two counts.

The Ministry of Finance, however, reviewed the amount demanded by MoHA and released Rs 2.44 billion on July 2. The MoHA said the money was needed to compensate the government's move to defer the elections by one-and-a-half months but stated that it is far from sufficient.

Speaking on condition of anonymity, a high level MoHA officer working at the ministry's Accounts Department, said, “This amount can cover the wage allowance of the temporary police hired for the election security. However, the money is inadequate to cover all the facilities provided to Nepal Police, Armed Police Force (APF), police in mufti, and District Administration Offices.”

Although the first and second rounds of elections have been held successfully, the Election Commission (EC) is yet to hold the third round of polls in Province 2 slated for September 18. The budget released by MoF does not include the election costs of the third round. “We estimate the cost for holding the elections in Province 2 to be around Rs 1 billion,” said the source.

On the other hand, the EC also has its own array of expenditures. As the election body already has started preparatory works, they said pushing the poll date by one-and-a-half months has cost them 'at least Rs 500 million' in managing the elections and extending the tenure of its employees. 

“Some employees had already claimed half of their allowances before being recalled due to election deferrals. We then had to provide them full allowances again for the same works,” said Election Commissioner Narendra Dahal, justifying the excess expenditures of half a billion rupees.

The financial burden of hiring temporary police
On February 28, just a week before the candidacy registration day, the government decided to hold the elections in two phases. The decision came at a time when the EC had already completed all arrangements for the elections. Likewise, the MoHA, which has the main responsibilities of arranging security during the elections, was also working full-fledged to arrange the security. When all the preparations were made to hold the elections in just one phase, the multiple deferrals in the following days drastically increased the cost of security, election materials and employee deployments.

According to MoHA, the Central Security Committee had analyzed the overall security situation of the country in view of the government's plan to hold the local elections in one go. As per their analysis, altogether 226,000 security personnel would be immediately required. In order to meet the requirement; 54,000 personnel were called from Nepal Police, 30,000 from APF, and 1,000 from the National Investigation Department (NID). Even after calling Nepal Army (NA) to fill in, the analysis concluded that 75,000 temporary police would be required. The recruitment process of temporary police then began immediately.

At first, temporary police were recruited for 55-day tenures. However, their terms were extended twice due to the frequent poll deferrals. As of now, their tenure stands at 90 days, according to MoHA Spokesperson Deepak Kafle.

Temporary police who were deployed in provinces 4, 5 and 7 have been retained even after elections in those regions were completed in the first phase. After the first phase elections, temporary police were being used for traffic management and providing security at exam centers, among others. 

By June 14, MoHA relocated them in the southern plains as the government had planned to hold the second phase of elections on that date. By the time preparations for the second polls reached the final stage, the government again deferred the elections in Province 2 just 12 days before the scheduled poll date.

According to Kafle, the ministry has not reached any conclusion on what to do about the temporary police deployed in Province 2. The expenses will increase further if the decision is taken to extend their tenure again. “The amount will easily reach Rs 1 billion if we add the wages of 75,000 temporary police,” he added.

“We'll provide the demanded budget”: MoF

The government has allocated Rs 17,230 per month for each temporary police. Besides the monthly wage allowance, each of them also received Rs 7,100 for uniform, Rs 1,000 as transportation cost, and a special 7-day afternoon-snack allowance of Rs 250 per day during elections and Rs 250 per day as special allowance.

A total of Rs 1.56 billion has already been spent in 35-day tenure extension of the temporary police following completion of their first tenure on May 14, shows the financial records. The sum total of their seven-day special allowance and food allowance stands at around Rs 265 million. 

Each Nepal Police, APF and NID personnel deployed for poll security receives an addition of 60 percent of their salary as an incentive. The financial figures reach even higher after adding their special allowance, food allowance and uniform costs, according to officials at MoHA. 

“It would require an exorbitant amount of money just to provide 60 percent of their salary to security personnel of Nepal Police, APF, and NID who were deployed for poll security,” said the MoHA official who spoke on condition of anonymity. “The more the election process prolongs, the more drastically the financial burden increases.”

The finance ministry had allocated a lump sum of Rs 19.27 billion for EC and poll security after the government announced the election date. From that amount, Rs 10.4 billion was set aside for EC while the remaining Rs 9 billion was allocated for security. The MoHA has been demanding excess amount for security after the allocated money turned out to be inadequate. 

Acknowledging that MoHA has demanded additional amounts, Joint-secretary at MoF, Ram Sharan Pudasaini said they are holding discussions on the budget they can provide MoHA for security. “Election is the priority of the country. It is not like road and irrigation projects. That is why we will provide the budget that has been demanded. If we could not meet the demand, we will seek other collaborative ways to make it available,” added Pudasaini, who is also Spokesperson for MoF.

Despite demanding additional budget, the home ministry has not released details of their security expenses. The ministry's officials only say that they are collecting details of the allocated sums. According to them, the budget allocated in the first phase has been spent on fuel, information collection, training, daily allowance and purchase of security materials.

Under the security expenses, NA received Rs 930 million, out of which they said Rs 100 million was spent on purchasing communication equipment. The remaining amount is said to be spent on daily allowances of the army personnel deployed for election security and other facilities, according to an official at the Ministry of Defense. “NA has demanded additional budget. However, they have not released their expenditure details,” said the official. The ministry claimed that as many as 64,000 army personnel were deployed in the first and second rounds of the elections.

The EC also recorded an increase in expenses following the frequent poll deferrals. “The EC had already opened offices of chief returning officers and election officers and deployed its employees before the government announced the elections in two phases. However, the government deferred the elections at the last moment, turning all our incurred expenses futile,” said Surya Prasad Sharma, Spokesperson for EC.

According to him, the election body had set up offices of the chief returning officers in all 75 districts and deployed 11 employees in each such office before the poll deferral. Likewise, election offices were also set up in each of 744 local units, with nine employees deployed at each such office.

“Before the election deferral, we had already spent over Rs 80 million in opening the offices and Rs 230 million in deploying the employees. We recalled 461 local level employees following the government's decision but their deployment expenses went in vein. However, we couldn't shut the offices, which contributed to the increase in expenses,” lamented Sharma. 

Former chief election commissioner Neel Kantha Uprety also said that holding the local elections in three phases increased the expenses. “Likewise, additional allowances have been arranged for employees. It also has contributed significantly to increase the election costs.”

Employees deployed by the EC are provided additional allowance of their salary's 121 percent as well as Rs 500-Rs 700 daily food allowance depending on their ranks. The EC has already spent over Rs 5.55 billion as election expenses. However, that expense does not include the vehicles and election materials provided by Nepal's friendly nations. 

Out of the total expenses, it is said that over Rs 3 billion was spent only on the management of employees. They still have not cleared the dues of Rs 250 million altogether owed to Janak Shiksha Samagri Kendra Limited for ballot papers printing and other logistics suppliers. EC spokesperson estimates that holding all phases of the local elections would cost them a staggering amount of about Rs 7 billion.

The EC is yet to hold the elections in Province 2, where the polls will be held in the third phase on September 18. Had the government made it clear from the beginning that the local level elections would be held in three phases, such an exorbitant amount of expenditures would not have been necessary, claimed EC officials.

“First, there would not have been the need to hire such a large number of temporary police if the elections were to be held in multiple phases. Ordinary police personnel would have been sufficient,” Election Commissioner Dahal said. “Likewise, we would not have needed to spend so much in purchasing election materials had the government clarified its motive to hold the local elections in multiple phases.”

According to Dahal, the EC had to buy 29,000 ballot boxes at the rate of Rs 3,260 per box at a short notice as per the government's earliest declaration to hold the elections in a single phase. The same ballot boxes that were used in the first phase elections could have been transported to other regions during the second and third phases. The government could have saved Rs 90 million of the taxpayers' money spent for buying ballot boxes.

Likewise, the purchase of low quality election materials has also added to the cost. According to an employee of the EC, the commission had decided to purchase red ink after the first phase of elections as “the blue ink used in the first round of elections created problems in counting the ballot papers which were also blue in color”. However, the red inks turned out to be of substandard quality. Sources said the use of the substandard ink for stamping completely rendered the ballot papers invalid as the ink spread around.

Multiple sources have accused EC's former secretary Gopinath Mainali for the substandard purchase. “We all decided to purchase red inks, but Mainali purchased very low quality inks that would bring setbacks to the elections if used,” said an election officer. The source informed that Mainali incurred a loss of Rs 3.2 million by purchasing the substandard inks.

The rising cost of democracy
Following the uprising against the autocratic monarchy in 1990, the country's first multiparty election was held in 1991. The EC had spent Rs 110 million to hold the election of 1991, according to 'Election Cost in Nepal', a book written by current Chief Election Commissioner Ayodhee Prasad Yadav. Likewise, another legislative election in 1994 cost the EC Rs 240 million, an increment by 122 percent. A similar election was held in 1999 at the total cost of Rs 360.6 million.

The cost drastically increased while holding the first Constitution Assembly (CA) election of 2008, where the election body spent Rs 2.9 billion. Likewise, Rs 4.26 billion was spent for holding the second CA election of 2013, excluding security costs, according to former EC officials.

Compared to the costs of past elections, the EC has already spent about Rs 6 billion (including Rs 250 million it owes to JSSK and other suppliers) before completing the final phase of the local elections. Not just the frequent election deferrals, multiple obstacles in election related works including vote counting process of various local units have also contributed to the growing expenditures.

The EC has abused the rights and authority given to it by the law, resulting in massive financial burdens on the state, says a report of the Auditor General released immediately after the second CA elections. Explaining how the expenses have increased, the report reads, “The EC cannot provide additional benefits to its employees for everyday works such as collecting voters' list with photo. However, the election body has been listing its everyday works as election-related works even when there are no apparent works regarding elections. Such abuse of power with the sole motive of claiming additional benefits has resulted in a heavy financial burden on the state, and hence, should be stopped immediately.”

Allowances, rental incomes and vehicles
According to a highly-placed source at the EC, there is a provision under which commissioners attending a meeting for election purpose receive Rs 2,000 per meeting, while each secretary and joint-secretary attending such meetings receives Rs 1,500 and Rs 1,000, respectively. “Officials receive allowances while participating in election related meetings. That is why, during the final days of the election preparations, as many as 10 meetings are held in a single day.”

An EC official confirmed the claim and admitted that chief officers and officers of the election body also receive 'meeting allowances', besides their salaries and various other allowances. The official further said, “The EC secretary sometimes attends as many as 10-15 meetings in a day. Even if he does not attend the meetings, he signs the minutes and receives the allowance.”

Section 38 of the Election Commission Act 2017 states, “EC can directly purchase goods and services from the market if it is not possible to call a public tender during elections.” This very legal provision has allowed the EC to bypass the Public Procurement Act, which is why election officials, commissioners, and politicians attempt to purchase maximum logistics during the election calendar.

The attempt to purchase electronic voting machines (EVMs) to 'digitalize' the elections is an example of it. EVMs can be purchased during normal times through a normal process. However, attempts to purchase EVMs only during election calendar shows that there are hidden interests of the election officials and politicians. This time, the attempt to purchase EVMs from the UK-based 'Smartmatik Company' did not succeed due to conflicts among the commissioners. 

The benefits taken by EC officials have also courted controversy frequently. For instance, CEC Yadav and Commissioner Ila Sharma both have houses in Kathmandu, but they have been accused of taking Rs 18,000 monthly from the EC as rental allowance. The matter was brought to light by former election secretary Mainali, who was recently transferred from the EC. Mainali has claimed that he was insultingly transferred just five days before the elections after attempting to prevent unnecessary expenses in rental allowance and also for suggesting ways to minimize the costs of the EC.

Commissioner Sharma has claimed that her house was destroyed by the quake and that she has since been living at her relative's home. “Secretary Mainali spread rumors without understanding my plights. I don't have a home and I am tired of shifting rental homes constantly. That is why I'm staying at rent in my brother-in-law's home. Anyone can come and take a look at the place I'm staying at,” she defended herself.

Besides this, all five EC commissioners have been provided with two vehicles each. However, the two vehicles have already been proven insufficient as the EC recently took a decision to provide a brand new Prado to each of its commissioners. However, the purchase process has not been able to move ahead as the MoF is yet to approve the application. 

As budgets are easily available and Public Procurement Act can be bypassed during election preparation periods, officials from EC to security bodies choose this time to make big purchases. For instance, the MoHA also had proposed to purchase 1,000 vehicles immediately after the government declared the poll date. However, the MoF rejected the application stating that the vehicles are provided by donor countries during every election.

A former election commissioner said, “As the legal provision allows bypassing the Public Procurement Act during elections, officials roll up their sleeves to take the full advantage of it. They collaborate with businesspersons and commercial companies for mutual benefits while misusing funds from the state's coffers.”

“Huge amounts of money could be saved if officials of the EC perform their duties honestly instead of looking to fulfill their selfish financial gains. But unfortunately, we do not see the possibility of such a situation at the moment.”

(This story was produced for the Center for Investigative Journalism, Nepal) 

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