Tags: Nepal | earthquake | rebuilding | 10 Billion

Nepal Earthquake Rebuilding Costs to Exceed $10 Billion

Tuesday, 28 April 2015 09:06 AM

The cost to rebuild Nepal after its most devastating earthquake in eight decades will exceed $10 billion and take years, Finance Minister Ram S. Mahat said.

Right now the government is struggling to save those who may still be trapped more than 72 hours after the 7.8 magnitude temblor struck the Himalayan nation. The death toll has already exceeded 4,300 and could climb beyond 6,000, Mahat said in an interview on Tuesday.

“We have reason to believe that there are survivors in the rubble but we don’t have equipment to deal with the situation,” Mahat said at his office in the capital of Kathmandu. “In Kathmandu Valley itself, big buildings have collapsed and they don’t know how to get people out.”

His reconstruction estimate is equivalent to about half of Nepal’s $20 billion economy, which is smaller than all 50 U.S. states. The government will appeal to the world for help when the immediate rescue effort ends, Mahat said, adding that a precise figure is very difficult to determine.

“The cost is incalculable,” he said. “It will be billions and billions of dollars in reconstruction and restoration of infrastructure.”

Heavy rains in Kathmandu on Tuesday impeded efforts to find any remaining survivors. About a third of Nepal’s 28 million people have been affected by the quake, with about 1.4 million in need of food assistance in Asia’s second-poorest country.

“Due to the mountainous geography, infrastructure damage, collapsed bridges and damaged roads, access to many of the affected areas is reported to be extremely limited,” the United Nations said in a statement.

Residents in Kathmandu are starting to become restless as they wait for food, water, medicine and power. Many are scared to sleep inside out of fear that the hundreds of cracked buildings in Kathmandu might crumble in another aftershock.

‘Grossly Inadequate’

Mahat said the government is overwhelmed and can’t provide proper relief. Many areas of the Himalayan nation are hard to reach on the best of days.

“Some relief we are providing but it is grossly inadequate in relation to the need,” Mahat said. “This was completely unexpected and the scale of devastation was unimaginable.”

He welcomed support from around the globe, including neighbors India and China. In a couple of days, the finance ministry plans to make cost estimates for the relief effort and ask the international community for support.

“It will be multilateral, bilateral and all possible sources,” he said.

Nepal’s economy was already slowing before the earthquake struck. The Asian Development Bank had forecast Nepal’s growth for the year ending July 15 at 4.6 percent, down from 5.2 percent the year before due to a poor monsoon and political wrangling. Mahat said it was too early to estimate the immediate economic impact from the quake.

Power, Fuel

While Nepal’s electricity authority says most of the nation’s power infrastructure is intact and it expects to restore electricity to the capital by tomorrow, that may bring little relief.

Nepal, under normal conditions, faces power cuts lasting as long as 16 hours a day because of a shortfall in generation capacity. Its hospitals, businesses and other critical infrastructure depend heavily on diesel-run backup generators for a reliable power supply. It imports all its oil products from India.

‘Severe Constraints’

The country only has four days of gasoline and 10 days of diesel stocks left at its main oil depot at Amalekhganj, about 110 kilometers south of Kathmandu, according to questions answered by Indian Oil Corp., which supplies more than a million tons of fuel annually to Nepal. The company is boosting fuel stocks at its Raxaul depot near the border so that it can move more fuel in when road access improves.

There are limitations to what can be airlifted by plane into Nepal, Indian Foreign Secretary S. Jaishankar told reporters in New Delhi yesterday.

“We are functioning under very, very severe constraints,” he said. “There is a finite limit to what Kathmandu airport can take. If the roads get transportable, then more relief can go in, and heavier equipment, vehicles would be easier to take.”

Kathmandu and the valley area around it account for a third of the nation’s economic activity, according to an estimate by Nepal’s central bank. Other major drivers include agriculture, remittances and tourism, which may suffer after at least 18 people died at Mount Everest base camp.

“Our priority is search and rescue and bringing the injured to safe places for treatment,” Mahat said. “Time is running out.”

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The cost to rebuild Nepal after its most devastating earthquake in eight decades will exceed $10 billion and take years, Finance Minister Ram S. Mahat said.
Nepal, earthquake, rebuilding, 10 Billion
Tuesday, 28 April 2015 09:06 AM
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