Nepal’s government is launching a major drive to reclaim public land and buildings occupied free of charge by party-affiliated trade unions.

The administration of newly elected Nepali prime minister Balendra Shah has placed the recovery of state-owned land and structures at the heart of its governance overhaul in the first month in office.

On 27 March 2026, the first cabinet meeting after taking office approved a 100-point reform package that explicitly targets the abolition of party-affiliated trade unions in public administration. Point 12 of the agenda declares that civil servants, teachers, professors and all public employees must “perform their duties free from direct or indirect affiliation with any party, group or interest centre”, with strict departmental action promised for violations.

To enforce this, the cabinet has directed the drafting of a federal civil service bill within 45 days and plans to introduce a civil service act through ordinance. The twin objectives are clear: make public administration impartial, neutral and accountable, and eliminate the “unwanted interference and informal pressure” that party unions exert on decision-making and service delivery.

Legal Weapon: From Free Use to Paid Leases or Eviction

The mechanism for reclaiming land is already on the statute book. In July 2022 the ministry of land management, cooperatives and poverty alleviation introduced a policy requiring any organisation using government land to convert its free “use rights” into a formal lease and begin paying rent. The rules were tightened in April 2025 to cover federal, provincial and local government properties alike.

Lease agreements must include detailed property descriptions, minimum bidding prices, a five per cent cash deposit or bank guarantee, and an annual rent escalation of at least five per cent. Organisations that fail to sign leases within the stipulated period face automatic reclamation under Clause 21, sub-clause 7 of the land-use procedures. The government can seize both the land and any structures built on it, registering them in the state’s name.

Despite repeated public notices, compliance has been patchy. Ministry secretary Madan Bhujel says: “Immediately after the policy was introduced, the ministry issued a public notice requesting the relevant parties to convert their land-use rights into leases. Although a few organisations came forward, many did not. Now, those who did not comply must vacate. We will complete the necessary process and take decisions accordingly.”

Prime Properties at Stake

Several high-profile sites illustrate the scale of the issue.

In Lalitpur, the CPN-UML central office occupies approximately 68,258 square feet of land granted in 2002 to the Tulsi Lal Memorial Foundation. The party currently pays Rs 400,000 a month under a five-year bilateral agreement.

Nearby in Dhumbarahi, the Pasang Lhamu Foundation occupies about 23,615 square feet of land granted in 2007; the UML previously used the premises and paid Rs 225,000 monthly after the 2015 earthquake.

At Babarmahal, two separate plots measuring 5,476 square feet each were allocated in 2012 to the Nepal Madheshi Civil Servants’ Union and the Nepal Civil Service Union, both widely seen as aligned with Madheshi and Congress parties. The site is popularly known as Madhesh Bhawan.

Other properties include a large plot used by the Nepal Teachers’ Association, one large plot in front of Singha Durbar’s southern gate occupied by the Nepal Government Employees Organisation (granted 2011), and additional buildings near the department of forests and soil conservation and the department of urban development used by unions linked to the former CPN-Unified Socialist and other parties.

These parcels were originally handed over during different coalition governments to unions affiliated with the CPN-UML, Nepali Congress, the then-Maoist Centre, Janata Samajbadi Party and its predecessors. What began as goodwill gestures to support institutional activities has become entrenched political real estate, the prime minister believes.

Mixed Reactions and Political Pushback

Not everyone welcomes the government’s move. Bhola Nath Pokharel, former vice-president of the Authorised Union of Civil Service Employees Nepal and a central committee member of the UML, called the plan “a stunt”. He argued: “The government gave land-use rights to trade unions affiliated with the UML, Congress, the then Maoists, and Madheshi parties, and institutional activities are being carried out there. To try to remove them now as a ‘stunt’ is wrong… Inviting ‘confrontation’ by threatening removal benefits no one.”

Pokharel urged the authorities instead to follow the existing lease-conversion law and encourage unions to transition peacefully.

Ministry officials, however, insist the policy is not punitive but corrective. They point out that years of non-compliance have deprived the state of legitimate rental income and allowed political influence to linger inside government premises. Converting the arrangements into transparent, paid leases would generate revenue and send a strong signal that public assets belong to the state, not to any single party.

Broader Implications for Civil Service Reform

If implemented fully, the land-reclamation drive will form only one pillar of a larger depoliticisation effort. The proposed federal civil service bill is expected to ban party membership for public servants and impose penalties for union activities that interfere with official duties. Supporters say the changes will improve efficiency, reduce patronage and restore public trust in administration.

Critics warn that abrupt eviction attempts could spark protests and legal battles, especially given the deep historical ties between major parties and their affiliated unions. They say that the government must therefore balance firmness with procedural fairness – issuing clear notices, allowing reasonable transition periods and ensuring decisions are not perceived as politically selective.

As the 45-day deadline for drafting the civil service bill approaches, all eyes are on the ministry of land management and the office of the prime minister.