Uncertainty looms over Dharahara project

  • National Reconstruction Authority in dilemma as the firm deemed fit for the job is facing corruption case

Feb 13, 2019-

The National Reconstruction Authority is in a dilemma whether to award contract to a company that emerged first in evaluation process to work as consultant for Dharahara reconstruction as the company has been indicted in a corruption charge.

A joint venture of ERMC (P) Ltd and East West Engineering Service (P) Ltd came first during the technical and financial evaluation carried out by the National Reconstruction Authority recently, for the job of consultant, according to officials at the NRA. But on December 7 last year the Commission for Investigation of Abuse of Authority had filed a corruption case against 21 individuals including the Managing Director Uddhav Raj Chaulagain, official representative Hemnidhi Sharma and team leader Arun Kumar Chaudhary of M/S ERMC-ITECO Nepal JV over substandard construction and repeated collapses of the main canal of the Sikta Irrigation Project.

“ERMC (P) Ltd and East West Engineering Service (P) Ltd is entitled to get the contract as it is the frontrunner in both technical and financial evaluations,”  said Prakash Thapa, joint secretary at the NRA. “But we are undecided on whether to award the contract after the CIAA filed a corruption case against the top officials of ERMC.”

The NRA had sought the opinion of the Prime Minister’s Office and the Public Procurement Monitoring Office regarding the matter about a month ago.

“We are yet to get any instruction from either office,” Thapa said. 

Also read: This is what new Dharahara would look like

PMO Secretary Sishir Dhungana said he was unaware about the issue.

The delay in appointing the consultant could affect the supervision works of the ongoing reconstruction of Dharahara, which was destroyed by the Gorkha earthquake in 2015.

The NRA had initiated the process of appointing consultant so that a company with expertise on heritage construction would supervise the construction works. The cost of consultancy service is around Rs50 million.

The Public Procurement Act does not have specific provision of denying contract to a bidder that has faced a corruption charge.  

One option to deny contract to the ERMC (P) Ltd and East West Engineering Service (P) Ltd JV is to scrap the entire bidding process itself. But the NRA officials said that they cannot scrap the bidding without valid reason.

As per the section 26 of the Public Procurement Act, a public entity can cancel the procurement proceeding, provided that none of the bids are substantially responsive or the price quoted by the lowest evaluated bid is substantially above the cost estimate, or requisitioned goods, construction works, consultancy services or other services are no longer required.

“We had initiated the process of hiring consultant as it needs specific expertise in supervisory entity,” said an NRA official.  The case of ERMC (P) Ltd and East West Engineering Service (P) Ltd is similar to the contract awarding process in the case of constructing building of Nepal Rastra Bank in Baluwatar, Kathmandu.

The NRA, which has also take responsibility of constructing the quake-damaged NRB buildings, was supposed to give the contract to SRBC Pappu JV, which had quoted lowest price for the project. But the NRA is undecided on the issue as well, largely due to the bad reputation of Pappu Construction and the corruption charge filed by the CIAA against its founder Hari Narayan Rauniyar and his son Sumit Rauniyar.

Published: 13-02-2019 07:43

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