Nepal Construction Permit Administration Simplification Project

Country: Nepal

Locations within Country: Kathmandu

Services: Business Process Inventory, Business Process Mapping (BPM), Business Process Reengineering (BPR), Design of One-Stop Shop (OSS)/Single Window

Context: 

The Nepal Investment Climate Reform Program (NICRP) has been working with the Government of Nepal (GoN) on developing Public Private Dialogue (PPD), a reform mechanism with participation of private sector, on assessing proposed Special Economic Zones (SEZ) regime, and implementation of business regulatory reforms.

Within the NICRP, one of the three projects is Regulatory Reform. The objective of the Regulatory Reform Project is to identify and remove regulatory constraints resulting in an increased ease of doing business (and increased economic activity), a reduction in the costs and risks of business operations, and an improvement in the government’s capacities to build and sustain reform momentum.

The Government of Nepal requested the NICRP-Regulatory Reform project to review the business regulatory and licensing system with the objective of improving the investment climate in Nepal.

On the basis of the request, IFC conducted the Nepal Business Licensing Study which represents a first-time ever comprehensive inventory of government-issued business licenses in Nepal. It also reviews in detail key licenses that govern selected priority sectors for Nepal’s economy. The information has been reviewed and validated by experts and stakeholders from the public and private sectors, and to the best of our knowledge represents the situation as of August 2011. From this basis, the Study presents options and opportunities to reduce burdens, streamline procedures and increase transparency and predictability for businesses operating in Nepal.

Assignment Description: 

Apex Consulting was engaged by the IFC to help the government of Nepal carry out the necessary reforms to the construction permit processes. This was achieved by working directly with the Construction Permit Task Force (CPTF), convened under the Director General of Department of Urban Development and Building Construction (DUDBC), to review and streamline the construction permit processes, with the end goal of enhancing the overall business environment in the real estate development sector.

The scope of the Nepal Business Process Reengineering project consisted of the following:

• Identifying 10 processes out the total of 125 licenses issued by the government of Nepal
• Preparing as-is process maps for the 10 identified processes
• Identifying inefficiencies/bottlenecks in the existing processes and point to priority areas for re-engineering of administrative processes in order to improve efficiency
• Developing the to-be process maps for each of the 10 identified processes
• Providing reform recommendations to the government

The table below shows the processes that were identified, after consultation with the IFC team and Government of Nepal (through the IFC team in Nepal), for mapping and reengineering in this project. These processes are referred to as “as-is” processes.

During this engagement, the following key constraints were identified and addressed in the construction permit on the government’s side:

1. Complex workflows and many dependencies within a particular department and across multiple departments
2. More levels than necessary for approvals
3. Repetition of work
4. Unnecessary field visits before construction begins
5. A high volume of paper work
6. A lot of back and forth between clients and staff

On the private sector’s side, the following key constraints were identified and addressed:

1. Incomplete applications
2. Quality of designs and reports
3. Deviations from approved original designs
4. Low compliance to the National Building Code (NBC), relevant laws, and regulations
5. Delays in updating designs as per comments and instructions