--- title: "Project environment; political environment in Nepal" subject: "Project Engineering" chapter: 1 key: "semester_7/project_engineering:political-environment-nepal" source: https://www.bctengineer.com/q/semester_7/project_engineering/political-environment-nepal site: BCT Engineering --- # Project environment; political environment in Nepal Project Engineering · Chapter 1: Introduction of Project and Project Management - Asked in: 2074 Asoj, 1+4 marks - Answer checked by Claude Opus 5.5 (high effort) on 2026-10-14 - Page: https://www.bctengineer.com/q/semester_7/project_engineering/political-environment-nepal - Whole chapter: https://www.bctengineer.com/md/semester_7/project_engineering/chapter-1 ## Question What is project environment? How does the political environment affect a project in Nepal? ## Short answer Project environment includes internal and external conditions influencing a project. In Nepal, political factors like policy changes, government instability, bandhs, budget delays, federal overlaps and land acquisition issues disrupt schedules, costs and approvals, while supportive policies can encourage investment. ## Answer **Project environment** is the set of internal and external conditions, such as political, economic, social, technological and natural factors, that surround and influence a project. #### Effect of the political environment in Nepal The political environment includes government policy, laws, stability and the behaviour of political parties. In Nepal it affects projects in these ways: - **Policy and law:** hydropower, tourism, mining and procurement depend on policy and law, e.g. the Public Procurement Act, the Hydropower Development Policy and the Electricity Act. Frequent changes create uncertainty. - **Government instability:** frequent changes of government and ministers delay decisions, approvals, budget release and project priorities. - **Bandhs, strikes and protests:** these stop work and transport, and labour and local groups make demands. - **Budget and funding:** projects depend on annual budgets and political priority; donors react to stability. - **Federalism:** three tiers of government (federal, provincial, local) create overlapping approvals and changed responsibilities. - **Land acquisition and compensation:** political pressure often delays right-of-way. - **Contractor selection and corruption risk:** political interference can reduce quality and cause delay. - **Positive side:** supportive policy, tax incentives and government guarantees (such as a power purchase agreement) encourage investment. Hence the manager should keep good relations with the authorities, include political risk in the risk plan and allow time contingency. ## Check yourself The answer's key points as multiple-choice questions, with the correct option and why. 1. Which items make up the political environment of a project? A. Only the contractor's staff B. Government policy, laws, stability and behaviour of political parties C. Only the weather D. Only the price of materials Answer: B. The political environment includes policy, laws, stability and party behaviour. (Key point: Political environment) 2. How does frequent change of government and ministers affect projects in Nepal? A. It has no effect B. It speeds up approvals C. It delays decisions, approvals, budget release and changes project priorities D. It removes the need for budgets Answer: C. Instability delays decisions, approvals and budget release. (Key point: Government instability) 3. What problem does federalism (three tiers of government) create? A. Elimination of bandhs B. Overlapping approvals and changed responsibilities C. Removal of all laws D. Free land for projects Answer: B. Federal, provincial and local governments can create overlapping approvals and changed responsibilities. (Key point: Federalism) 4. Which is a POSITIVE political influence mentioned? A. Frequent policy change B. Bandhs C. Right-of-way delay D. Supportive policy, tax incentives and guarantees like a power purchase agreement Answer: D. Supportive policy, incentives and PPA guarantees encourage investment. (Key point: Positive political effects) 5. How should a manager deal with political risk? A. Blame the contractor B. Ignore it C. Keep good relations with authorities, include political risk in the risk plan and allow time contingency D. Stop the project at the first bandh Answer: C. The recommended response is relationship building, risk planning and time contingency. (Key point: Manager's response) ## Related in Project Engineering - [Project operates in a dynamic environment](https://www.bctengineer.com/question.md?key=semester_7%2Fproject_engineering%3Adynamic-environment-explain) — Project Engineering, chapter 1, asked 3× - [Classify project; characteristics; good environment](https://www.bctengineer.com/question.md?key=semester_7%2Fproject_engineering%3Aclassify-project-importance-environment) — Project Engineering, chapter 1 - [Project types and task environment elements](https://www.bctengineer.com/question.md?key=semester_7%2Fproject_engineering%3Aproject-types-task-environment-elements) — Project Engineering, chapter 1 - [Project vs traditional management; external environment](https://www.bctengineer.com/question.md?key=semester_7%2Fproject_engineering%3Aproject-vs-traditional-mgmt-external-env) — Project Engineering, chapter 1 - [Scope of project engineering; dynamic environment](https://www.bctengineer.com/question.md?key=semester_7%2Fproject_engineering%3Ascope-project-engineering-dynamic-env) — Project Engineering, chapter 1 - [Project environment and dynamic operation](https://www.bctengineer.com/question.md?key=semester_7%2Fproject_engineering%3Aproject-environment-dynamic-example) — Project Engineering, chapter 1 ## Related in other subjects - [Short note: Major environment issues of Nepal](https://www.bctengineer.com/question.md?key=semester_7%2Ftechnology_environment_and_society%3Anepal-env-issues-note) — Technology, Environment and Society, chapter 4 - [Project environment](https://www.bctengineer.com/question.md?key=semester_7%2Fict_project_management%3Aproject-environment) — ICT Project Management, chapter 2 - [Economic, social and political impacts of WWII](https://www.bctengineer.com/question.md?key=semester_7%2Ftechnology_environment_and_society%3Awwii-impacts) — Technology, Environment and Society, chapter 3, asked 2× - [Function of project management in Nepal](https://www.bctengineer.com/question.md?key=semester_8%2Fconstruction_management%3Acpm-function-nepal) — Construction Management, chapter 1