Wagle puts Nepal's flood rebuild at $4 billion to $5 billion, about a tenth of the economy

Finance Minister Swarnim Wagle said on Saturday that rebuilding after the Bhote Koshi flash flood will cost $4 billion to $5 billion. That range is close to a tenth of Nepal's roughly $45 billion economy and still below the reconstruction bill after the 2015 earthquake. He told Reuters the figure is a working estimate while a fuller count of losses is finished.

In an earlier Bloomberg Television interview he had said damages would come to "at least a few billion dollars" once they were quantified "in a week or so," and that preliminary numbers were "quite worrying." The Saturday range is the first time a cabinet minister has put a band on the work.

The physical list is already long. Wagle said about 25 concrete bridges were damaged and that hydropower projects totalling 700 megawatts were hit. The flood on 26 August began as ice and rock collapsed near the Nepal-China border and sent water and debris down the Bhote Koshi and Trishuli. By the 10 a.m. bulletin on 29 August, Nepal's disaster authority recorded 626 dead and 2,426 missing. Police had recovered 616 bodies by 6 a.m.

Cash on hand and cash promised

The Prime Minister's Disaster Relief Fund held Rs 2.34 billion when Wagle first briefed reporters after the flood. The Finance Ministry allocated Rs 1.17 billion to the Home Ministry for immediate use. In the 36 hours from Wednesday afternoon to midnight Thursday the fund took in another Rs 1.918 billion through accounts at ten commercial banks, lifting the balance to about Rs 4.091 billion from Rs 2.172 billion before those deposits.

Surya Nepal handed over Rs 150 million. Businesswoman Raji Rana, 87, sent Rs 10.9 million. Prime Minister Balendra Shah and the cabinet agreed to deposit one month of their salaries into the same fund. The cabinet also told the Finance Ministry to draft a relief package for households and firms and gave in-principle approval for Krishi Samagri Company Limited to buy 25,000 metric tonnes of DAP fertiliser from India on a government-to-government contract.

On external money, Wagle's briefings have used two different World Bank figures in two settings. Speaking after an all-party meeting he said talks with the Bank had secured about Rs 25 billion. In the Bloomberg interview he said the Bank had agreed to redirect at least 10 percent of undisbursed project money, about $160 million, and that the Asian Development Bank had committed $5 million. China, India, Japan and the International Federation of Red Cross and Red Crescent Societies were listed as sources of immediate support. Those pledges still have to move from announcement to cash in a ministry account.

What a tenth of GDP means

Nepal cannot float that bill on domestic tax receipts in a single year. The 2015 earthquake reconstruction ran for years and left unfinished houses in several districts. A flood that destroyed bridges on the China road also destroyed a trade route. Until those spans are back, customs revenue and transit cargo stay lower, which is the opposite of what a reconstruction budget needs.

Wagle has asked for a fundraising campaign that is different from the usual disaster appeal. He has also said there will be no shortage of money for rescue in the next few days. Both can be true: the helicopter hours are fundable now; the bridges and the 700 megawatts are a multi-year capital problem.

The death toll will keep moving as bodies are pulled from mud and from rivers as far downstream as India's Gandak. The $4 billion to $5 billion band will move too, once engineers finish walking the damaged plants and the missing are reclassified as dead or found. For now it is the number Kathmandu is taking to the World Bank, the ADB and the neighbours.