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 As the level of engagement between the two countries increases, the currently stable Nepal-China relations are likely to more and more resemble the topsy-turvy Nepal-India ties. Right now, the communist government in Kathmandu seems commit­ted to closer cooperation with Beijing, come what may. Pursued wisely, this policy of engagement with the Middle Kingdom could pay off. China seems committed to closer ties following the long-awaited Nepal visit by Xi Jinping last October. “The visit by a Chinese president after 23 years has helped scale up trust at the top political level, which in turn has had a pos­itive impact on other bilateral issues,” says Rupak Sapkota, deputy executive director of the Institute of Foreign Affairs, a govern­ment think-tank. The spreading coronavirus contagion in China could dent cooperation a bit, particularly in tourism. Nepal will now struggle to meet its goal of bringing 500,000 Chinese tourists in 2020. Otherwise, accord­ing to Sapkota, China has already assured of “special arrangements to offset the effects of coronavirus in projects, tourism, and other areas.”

The Chinese seem keen on improving the condition of the two roads linking the two countries: Araniko Highway and Kathman­du-Rasuwagadhi Highway as they believe that the much-touted rail-link could take some time to materialize, given the difficult terrains it has to pass through. If the two major road links can be turned to all-season routes, as China wants, bilateral trade could see a big boost.

Says Mrigendra Bahadur Karki, executive director of the Center for Nepal and Asian Studies, China has been in ‘action-mode’ in Nepal following Xi’s visit.

Headway in Chinese projects following Xi' s Nepal Visit 

Chinese President XI Jinping’s Nepal visit last October seems to have served as a catalyst to push forward several impending bilateral issues and projects. Apart from the agreements and under­standings signed, the visit helped resolve other pending issues as well.Xi was the first Chinese president to visit Nepal after a 23-year hiatus. During his visit, the two countries signed 20 agreements and under­standings. Before that, Nepali Pres­ident Bidya Devi Bhandari had vis­ited China in April 2019 to take part in the second Belt and Road Forum where she held high-level meetings and signed some agreements.

“The visit by a Chinese president after 23 years has helped scale up trust at the top political level, which in turn has had a positive impact on other bilateral issues,” says Rupak Sapkota, deputy executive director of the Institute of Foreign Affairs, a government think-tank. He adds that an environment of trust is already seen in multiple sectors.

Agreements are being imple­mented at a faster clip, although the coronavirus outbreak has affected them somewhat. “But as far as I know, the Chinese side has already assured Nepal that it would make special arrangements to offset the effects of coronavirus in projects, tourism, and other areas,” Sapkota says. After Xi’s visit, around two dozen Chinese delegations have come on follow-up visits to Nepal.

“At present, China and Nepal are stepping up efforts to implement the important agreements made by the leaders; some projects have already made progress,” said Chi­nese Ambassador to Nepal Hou Yanqi during a recent press meet.

Of late, the cross-border railway has been a hot topic of discussion. But due to the difficult terrains, the railway line will command tre­mendous resources, time, and cut­ting-edge technology. Regardless, the two sides are making progress on the rail line. After pre-feasibility, they have agreed to a three-phase feasibility study. In recent meet­ings, officials have agreed on what each side needs to do. Talks are also underway for the Kathamn­du-Pokhara-Lumbini railway lines.

Roads over rails

As the railway is still under study, it may take some time yet. At the moment, construction of new roads and upgrade of old ones remain a priority. There has already been some progress in upgrading two major roads connecting Nepal and China: Araniko Highway and Kath­mandu-Rasuwagadhi Highway.

The Chinese side is helping the Department of Roads in the third phase of maintenance of Aranika Highway, which was damaged by the 2015 earthquakes. There has also been an agreement to expand and blacktop Syaphrubesi-Rasuwagadhi section of the Kathmandu-Rasu­wagadi Highway. Yet with the Nepali side is yet to demolish roadside structures and remove electricity poles, there have also been delays. Once this phase is done, the road expansion will start in earnest.

If these two major highways come into operation in all seasons, they are expected to greatly boost bilat­eral trade. Due to the difficult ter­rains, the two sides have also agreed to build two tunnels along the high­ways to ease connectivity. An agree­ment to this effect was signed during Xi’s visit. “To facilitate the railway project, the process of building tun­nels has moved forward,” Prime Minister KP Oli said while address­ing the parliament on February 15. A team of Chinese technical officials is already in Nepal to study the tun­nels’ feasibility.

Mrigendra Bahadur Karki, execu­tive director of the Center for Nepal and Asian Studies, says that after Xi’s visit, China has been in action-mode in Nepal, which means all agreements signed during the visit will progress swiftly. “Xi came after the formation of a stable govern­ment in Nepal. It indicates China was in favor of a stable government so that projects could be imple­mented,” Karki says. “Obviously, China has become more proactive in Nepal, and this level of activity is only expected to rise.”

Delivering diversification

There has also been progress in the implementation of the Transit and Transport Agreement signed in 2016 as well. The follow-up proto­col implementation agreement was signed during President Bidya Devi Bhandari’s Beijing visit last year. The protocol came into effect on 1 January 2020. As per the agreement, Nepal is allowed the use of four Chi­nese ports for third-country trade and transit, in what is considered a major progress in changing Nepal’s land-locked status. It is a part of Nepal’s broader foreign policy of diversifying its trade and transit facilities.

There has also been a joint feasi­bility study for bilateral free trade agreement. China has been urging Nepal to sign the agreement at the earliest, but Nepal insists it needs more homework. The two countries are also in the process of choosing a location for China-Nepal Cross-bor­der Economic Cooperation Zone, and officials have already held a few rounds of talks in this regard.

Similarly, the two countries have agreed to hand over each other’s cit­izens who illegally cross the border, as a part of an agreement reached during XI’s visit on the boundary management system. Both the coun­tries are working to implement the agreement, even with concerns that such provisions could be misused to forcefully repatriate Tibetan ref­ugees.

Bilateral trade is also booming even though trade imbalance with China remains a concern. But things may be improving for Nepal. Accord­ing to data provided by the Chinese Embassy in Kathmandu, “In the first 10 months of 2019, the trade volume between China and Nepal reached US $1.2 billion, an increase of 36.1 percent year-on-year, of which Nepal’s export to China increased by 58.1 percent.”

There is also increased collabo­ration in tourism. With Xi’s visit, the number of Chinese tourists is expected to rise, notwithstand­ing the effects of the coronavirus epidemic. Chinese investment is increasing every year; it is already the largest investor in recent years. In fiscal 2018/19, China's investment in Nepal was US $114 million.

Progress amid uncertainty

Despite progress in other areas, the finalization of projects under the Belt and Road Initiative (BRI) is still being hindered. The two countries are yet to select BRI projects mainly due to differences over investment modality. Sapkota of the govern­ment think-tank blames the bureau­cracy’s tardiness for the slow prog­ress. “It is the responsibility of the taskforce formed under our foreign secretary to finalize technical details and present them to political leaders who can then settle other issues,” Sapkota says. Nepal had signed the BRI framework agreement in May 2017, and the government had ini­tially identified three dozen projects under it, which has now been cut to nine.

Ajaya Bhadra Khanal, research director at the Center for Social Inclusion and Federalism, says that China has adopted a policy of slowly but steadily expanding bilateral rela­tions after Xi’s visit. “Infrastruc­ture projects are in the preparatory stage, so there is not much visible progress. China has given priority to areas such as cultural relations, stra­tegic community and people-to-peo­ple ties,” adds Khanal, who has been involved in an in-depth research of Chinese engagement in Nepal in the recent past. “Enhancing political relationships is another priority area for China. China is developing ties not only inside the ruling Nepal Communist Party but also with the main opposition Nepali Congress and other parties.”

Even though there may in the future be many upheavals in Nepal-China ties, it is hard to see the increased level of engagement between them decrease

February 13th marked the 25th anniver­sary of the start of the Maoist ‘people’s war’ that kicked off in 1996 and formally ended with the signing of the Compre­hensive Peace Accord in 2006. As ex-Mao­ist leaders like Paudel put it, the decade-long war—in which around 17,000 peo­ple were killed and nearly 1,300 made to ‘disappear’—brought about revolutionary changes in Nepali society. According to its backers, the war was instrumental in the removal of monarchy, heralding of the new federal republic, empowerment of women and other marginalized groups in various ways, and in creating greater political awareness.

“Think about it. None of it would have been possible under the old 1990 constitu­tion,” says Paudel.

Yet there is also no shortage of harsh critics of the civil war who reckon the pro­gressive changes that the Maoists take credit for could have come even without the blood­shed. If the Maoists could bring about these changes through the barrels of their guns, they wouldn’t have had to lay down their arms and agree to a peaceful movement with other political parties, goes the count­er-argument. And it was this peaceful move­ment that overthrew the monarchy and brought about progressive changes. More­over, even without the Maoist war, these changes were inevitable in a fast-moderniz­ing world. What the war did instead, add the critics, was push Nepal’s development back by at least a decade and institutionalize a culture of violence.

The debate continues, even as the mother Maoist outfit under Pushpa Kamal Dahal that waged the civil war is no longer in exis­tence. With the armed phase of the Maoist movement apparently over, the party has merged with a mainstream communist party and the combined outfit now leads the government. When the mother Maoist outfit joined peaceful politics, dissent in the party had reached a new height, as the hardliners refused to accept the ‘surrender’ before parliamentary forces. As a result, multiple Maoist outfits splintered away. A few of them are still out to complete the ‘great revolution’ with guns.

“The most important question we have to ask while evaluating the Maoist insurgency is if it achieved its stated goal,” says Bhojraj Pokharel, a political analyst. “It didn’t. They talked about establishing a completely new system, and they failed.” Pokharel says the former revolutionaries have instead been thoroughly co-opted into the corrupt system they wanted to do away with. “This makes me wonder if all the violence was worth it,” Pokharel muses

Never mind the Venezuela fias­co. There is otherwise limited eco­nomic, political, cultural or peo­ple-to-people exchange between Nepal and countries in the Americas. This final part of our APEX series examines the status of bilateral rela­tions with countries in the American continent except the United States (which we dealt with in a separate series). Embassies and missions in Brazil, Canada, Washington DC and Nepal’s Permanent Mission in New York look after all the countries in the Americas with which Nepal has diplomatic ties.

Diplomatic relations with coun­tries of this region are slowly expand­ing. For instance, there was a signif­icant development in Nepal-Costa Rica relations when Prime Minister KP Sharma Oli paid an official visit to the country in September 2018 at the invitation of Costa Rican Presi­dent Carlos Alvarado Quesada. The two countries agreed to collaborate in areas of climate change, wom­en empowerment, rule of law, and agriculture. Such cooperation could deepen in the days ahead.

“Latin American and Asian coun­tries, especially China and India, are increasingly looking to deepen their economic, trade, investment and diplomatic as well as in some cases security and defense ties,” says Anil Sigdel, Director at Nepalmattersfo­rAmerica.org, a Washington-based think-tank. “This could be an oppor­tunity for Nepal.”

Nepal has long and deep engage­ment with Canada, and prepara­tions are underway to send Nepali migrant workers to Canada to work in agriculture, livestock, and hospitality. Canada receives half a million migrant workers from different countries every year, and the government of Nepal is requesting Canada to accept Nepali nationals as well.

Mexico is another country with which Nepal has a long diplomatic relation, even though Nepal does not have an embassy there. Mexi­co’s private sector has an interest in Nepal’s hydropower, tourism, and infrastructure.

“As Latin America looks beyond traditional partners such as Europe and the US, and converg­es with Asia in the framework of South-South cooperation, Nepal already has an advantage,” says Sigdel. “But for Nepal to engage with Latin America and benefit from its new business dynamism, it is vital that more Nepalis learn regional languages like Spanish and Portuguese.”

The Americas might seem distant. But as Nepal looks to diversify its for­eign policy in this globalizing world, they could as yet play an important role in boosting Nepal’s trade, tour­ism and investment.

On 25 January 2019, developments in the Latin American country of Venezuela created ripples in Nepal’s political and diplomatic circles. On that day co-chair of Nepal Communist Party Pushpa Kamal Dahal issued a statement, completely out of the blue, saying he “strongly denounces the US and its allies’ intervention in the internal affairs of Venezuela...”
There is little meaningful engagement between Nepal and Venezuela. But some leaders of NCP and fringe parties feel close to Nicolas Maduro’s country on ideological grounds. Or they at least betray some ideological affinity for governments with communist backgrounds. Dahal’s statement put Nepal government in a fix. The US, Nepal’s longtime ally, strongly objected and sought a clear government position.
The government seems to have learned. Referring to the ongoing discussions on the MCC inside the ruling party, government spokesperson Gokul Banskota said on January 30 this year: “We have an example of issuing press statement three times in the case of Venezuela. So Nepal should not try to explain the strategy and policy
of big powers.”
There is limited economic, political, cultural and people-to-people exchange between Nepal and countries in the Americas. But Nepal is trying to expand its diplomatic footprints there. This final part of our APEX series examines the status of bilateral relations with countries in the American continent except the United States (which we dealt with in a separate series).
Embassies and missions in Brazil, Canada, Washington DC and Nepal’s Permanent Mission in New York look after all the countries in the Americas with which Nepal has diplomatic ties.
Former Foreign Secretary Madan Kumar Bhattarai reiterates that except for the US and Canada, and to some extent Brazil, Nepal’s engagement in other American countries is minimal. “They are very far from Nepal,” Bhattarai says. “Among South American countries, Brazil is an emerging, hydropower-rich economy, which is why our engagement with it has somewhat increased.”
Wasted energy?
Of late, Nepal has been accused of haphazardly opening embassies in countries including in the Americas, with a question mark on their performance. But Bhattarai reckons aid utilization by smaller American countries could be an area of study for Nepal. “Some like Chile have been outstanding in the utilization of aid provided by Japan and other developed countries.”
One thing that brings Nepal and those countries somewhat closer is the Non-Aligned Movement. The United Nations operations, the Least Developing Countries (LDCs), and other international platforms provide added space for engagement.
Diplomatic relations with countries of this region are slowly expanding. For instance, there was a significant development in Nepal-Costa Rica relations when Prime Minister KP Sharma Oli paid an official visit to the country in September 2018 at the invitation of Costa Rican President Carlos Alvarado
Quesada. The two countries agreed to collaborate in areas of climate change, women empowerment, rule of law, and agriculture. They also agreed to work together on various multilateral forums. Foreign policy observers, however, criticized the PM’s visit
as worthless.
The two countries had established bilateral relations in 1977. Notwithstanding the criticism our PM copped, Nepal could possibly learn from Costa Rica on how to achieve the right balance between environment and development. The country has set a sterling example in renewable energy.
“Latin American and Asian countries, especially China and India, are increasingly looking to deepen their economic, trade, investment and diplomatic as well as in some cases security and defense ties, says Anil Sigdel, Director at NepalmattersforAmerica.org, a Washington-based think-tank. “This could be an opportunity for Nepal.”
“The increasing connectivity between the Americas and Asia is good news for Nepal as the country is well-known for its Himalayas and its rich culture throughout Latin America and the Caribbean,” Sigdel adds. The growing number of Latin American tourists visiting India and China, he reckons, could easily extend their trip by a few days to come to Nepal.
Meanwhile, bilateral relations with Argentina are also evolving. Foreign Minister Pradeep Gyawali visited Argentina to attend the Second High-level UN Conference on South-South Cooperation. During the visit, he met Vice Foreign Minister of Argentina, Gustavo Zaluvinen. The two discussed better bilateral ties and economic linkages.
Nepal also has friendly relations with Cuba, even though there are no economic and political ties between the two. Cuba had sent a team of medical doctors in the immediate aftermath of the 2015 earthquakes. Moreover, Nepal has adopted a formal position on Cuba-US relations: “Nepal always stands in favor of normalization of bilateral relation between the United
States and Cuba.”
The Caribbean country of Saint Lucia is the latest to establish diplomatic relations with Nepal (in 2019). Both Nepal and Saint Lucia are members of the Group of 77 and the Non-Aligned Movement.
Thaw with Canada
Nepal has long and deep engagement with Canada, and preparations are underway to send Nepali migrant workers to Canada to work in agriculture, livestock, and hospitality. Canada receives half a million migrant workers from different countries every year, and the government of Nepal is requesting Canada to accept Nepali migrants as well. (Canada does not have an embassy in Kathmandu and its mission in New Delhi looks Nepal affairs.)
PM KP Oli met his Canadian counterpart Justin Trudeau in 2018, marking the first high-level meeting between Nepal and Canada after the establishment of diplomatic relations. Till date, around 90 Canadians have ascended Mt. Everest, and around 50,000 Nepalis currently live in Canada. Moreover, around 7,000 Bhutanese refugees of Nepali origin have been resettled in Canada. Trade between two countries is miniscule even although political relationship seems to be picking up.
Canada-Nepal Parliamentary Friendship Group was formed in the Canadian parliament on 4 October 2016; it organizes regular exchange visits. There has been bilateral development cooperation through the Canadian International Development Agency since 1970s, with the earliest cooperation noted in 1952 via the Colombo Plan. After Nepal’s 2006 political change, Canada supported democratic transition and the peace process. On trade, there is duty free access to some Nepali products in the Canadian market.
Nepal exports tea, coffee, spices, animal fodder, articles of leather, handbags, paper, paper-board, wadding, felt and nonwovens, special yarns, ropes and cables to Canada. In turn, it imports edible vegetables, dried peas, lentils, certain roots and tubes, nuclear reactors, boilers, machinery and mechanical appliances and parts, and aircraft from the North American country. Of late, Canada’s private sector has shown an interest in Nepal’s energy sector.
Energy, rural development, health, aviation, education, geographical survey, agriculture, poverty alleviation, health care, and food security are areas of Canada’s support for Nepal.
In recent years, engagement with Jamaica is also on the rise. Tourism Minister of Jamaica Edward Bartlett had even taken part at the inaugural event of Visit Nepal Year 2020 in Kathmandu.
As Bhattarai the ex-foreign secretary hinted, Brazil has been enjoying outstanding economic growth in recent decades—possibly a reason for growing relation between Brazil and Nepal. There is technical cooperation between the two countries, and a bilateral consultation mechanism is also in place.
Mexico is another country with which Nepal has a long diplomatic relation, even though Nepal does not have an embassy there (Nepal’s Ambassador to the US serves as non-resident envoy to Mexico. Likewise, the Mexican Ambassador to India is accredited to Nepal as well.) Mexico’s private sector has an interest in Nepal’s hydropower, tourism, and infrastructure projects.
“As Latin America looks beyond traditional partners such as Europe and the US, and converges with Asia in the framework of South-South cooperation, Nepal already has an advantage,” says Sigdel of the Washington-based think-tank. “But for Nepal to meaningfully engage with Latin America and benefit from its new business dynamism, it is vital that more Nepalis learn regional languages like Spanish
and Portuguese."

For a long time the all-party mechanisms governing local level units after the dissolution of elected local governments in 1997 were considered among the most corrupt public entities in Nepal. In the absence of elected office-bearers, the local political representatives, who were really not accountable to anyone, open­ly siphoned off vital funds meant for development projects. The hope was that with the election of office-bearers, there would be a reduction in local-level corruption. It has proven to be a false hope.

Local elections were finally held in 2017, after the country went 20 years without elected representa­tives. This also marked the imple­mentation of federalism enshrined in the new constitution. But local representatives, the torchbearers of federalism, are giving a poor account of themselves. These days, 27 percent of all complaints (of over 24,000 in 2019) the Commission for Investigation of Abuse of Authority (CIAA) gets relates to local govern­ment units.

In another recent CIAA survey held across 15 sample districts, 67.6 percent of those surveyed report­ed increased corruption at the local level.

Thus, even though Nepal has climbed up the Transparency International’s Corruption Percep­tion Index this year, the local level appears to be a grim place. There are many factors abetting local level corruption. Rampant impunity, political protection of the corrupt, high electoral campaign financing, insufficient laws—they all contribute.

The growing perception that the agencies responsible for bringing federalism to people’s doorsteps are the biggest bastions of corrup­tion is dangerous for the health of the nascent federal republic. It’s true that the federal-level leaders in Kathmandu have been reluctant to delegate power and responsibility to the provincial and local levels. But the local units that often complain about the lack of funds and man­power are also making a poor use of what they already have.

This will continue to be the case until a sense of accountability is instilled in them. It’s difficult to keep a tab on all 753 local units in the country, as the CIAA is find­ing out. Never mind the new TI rankings; Nepal is still a thoroughly corrupt country.

In 2019, the Commission for Investigation of Abuse of Authority (CIAA), the anti-corruption watchdog, received 24,085 complaints related to corruption and irregularities in public and private offices across the country. Of them, complaints related to local governments were at an all-time high: almost 27 percent. The figure was 23 percent last year. Other complaints hardly crossed 15 percent. Does it mean our local bodies have grown more corrupt?
“The high number of complaints related to local level units means these bodies are thought of as highly corrupt,” says the CIAA spokesperson Yadav Koirala.
There is a perception that corruption at local level has been rising after formation of local and provincial governments following the 2017 elections. After the expiry of the term of local bodies in 1997, corruption was rife for over two decades. But, instead of improving after the 2017 elections, the situation seems to have actually worsened.
Government data and various surveys show corruption is more prevalent at the local level than at the center. Recently, the CIAA conducted a 15-district survey aimed at garnering public perception of corruption. Of the 3,000 respondents, 67.6 percent reported increased corruption at local units and 14.9 percent said they paid bribes to officials to get things done. Of the respondents, 31.6 percent were from Karnali Province, who reported corruption in 76 of 79 local units in the province. Respondents said corruption had increased after the formation of local units two and half years ago.
There are three main reasons for increase in local level corruption. First is impunity, which gives an impression that one can get away even if found guilty of corruption. Second is political protection, which runs from top to bottom and goes even beyond party lines. Political leaders try to block both the filing of a complaint and the action by anti-corruption bodies. The third reason is the tendency of elected officials to recover electoral expenses through abuse of power.
Serving political interests
Elections have been a costly affair in the past one decade. Candidates spend millions of rupees even to campaign for a ward chair’s post. They often incur debts, and try to recoup the money if elected. Former chief of the CIAA, Surya Nath Upadhyay, reckons there also “insufficient laws and mechanisms to control corruption.”
“The status of Province 2 is worse still as there is a social compulsion to earn money by any means,” adds Upadhyay.
Few weeks ago, the CIAA dispatched a long directive to local units pointing out possible areas of improvement. The commission has found that many local bodies allocate budget without proper endorsement, and transfer funds from one head to another without justification. Even after over two years, some local units are operating without an endorsed budget. This increases chances of corruption, according to the commission.
There is also a tendency of doling out money to party cadres in the name of medical treatment, which is against the Local Government Act 2017. The CIAA further states that local governments approve development projects without consulting experts, locals, and marginalized communities. The anti-graft body says projects are mostly designed to serve political interest.
The user committees formed at the grassroots level are another reason to worry as the CIAA finds them contributing to corruption in development projects. The commission has found that the same people who select projects sit in local user committees, which makes check and balance impossible. The commission has suggested dissolution of such committees.
“However, it is not easy to dissolve them without creating their alternatives on the ground. I don’t think it’s possible,” says Upadhyay. The CIAA is of the view that such committees should at least be kept away from political parties and bureaucrats who try to manipulate them for their advantage.
In some districts, the user committees and contractors receive big amounts in advance without doing anything. The CIAA has issued circulars to the local bodies to take action against these people and find alternative ways to complete work on time. There have also been cases of elected representatives operating heavy equipment companies. Moreover, there is a tendency of giving development tasks to the same company repeatedly, blocking competition, in clear violation of the Public Procurement Act. The CIAA has also found that in some places payments were made against fake bills.
Wasting taxpayer money
To reduce the chances of political leaders taking projects to their pocket areas, the CIAA has asked all local bodies to select projects based on relevance and long-term strategy.
The infrastructure sector probably suffers the most. Many projects are built without proper documentation. There is also a lot of forging, such as making fake reports of project completion. Technical officers who are responsible for monitoring the quality of construction rarely reach the sites. In several cases, there is lack of trained technical manpower, and the user committees do nothing more than exploit the situation.
Elected local officials used to draw salaries after assuming office in 2017, which was against the law. In October last year, the Supreme Court annulled the provincial laws that allowed this practice. As per the law, these officials are entitled to only some facilities including monetary incentives but not salaries. Many municipalities and rural municipalities have bought luxurious vehicles, which has been criticized as extravagance with taxpayer money.
Meanwhile, local governments get funds from both government and non-governmental organizations for ‘training and empowerment’. The CIAA finds that most such projects result in no positive outcome. Such programs have rather become platforms to pay allowances to government staff and political cadres. The same people participate in different events. In some cases, the CIAA found forged bills for event expenses.
Local bodies also seem to disregard environment while starting new construction. An environmental impact assessment is never held. Even the durability of the work is not studied. Newly constructed roads are so weak that they can be easily swept away by floods and landslides, giving local officials further incentive to allocate and siphon off funds for maintenance.