‘Project deal without funds delays works’


Oct 8, 2018-

The tendency among government agencies to award contract without allocating enough funds has delayed implementation of many development projects, officials have said.

Clause 6 of the Public Procurement Regulation states that a government office cannot start the procurement process without ensuring necessary financial resources and delineation of the project site.

But most of the ongoing bridge projects were awarded without adequate resources, according to the Department of Roads.

As many as 926 bridges were under construction until last fiscal year in deals worth a total of Rs63 billion. But the budget allocated last fiscal for the bridges stood at a meagre Rs3.5 billion, according to the department.

In the current fiscal year, the government has set aside Rs2.88 billion for those under construction and some 40 new bridges. Road officials say they are forced to award contracts even when there is no sufficient budget.

Arjun Jung Thapa, chief of the bridge division at the department, said they were compelled to award the contract as lawmakers pressed them once the projects are incorporated in the government’s annual budget. “The Finance Ministry must not incorporate the project in the budget if it cannot allocate enough funds,” he said.

Officials at the Finance Ministry and the Financial Comptroller General Office told the parliamentary Finance Committee on Sunday that implementation of many projects would have gone unhindered if the regulation was followed.

Financial Comptroller General Suresh Pradhan said the regulation allows all the preparatory works for awarding the contract, until the financial resources are managed.

“The regulation bars awarding the contract because it adds financial burden to the government,” said Pradhan. “It does not stop preparation of tender documents, and inviting bids and the request for proposal.”

With limited budget, the Finance Ministry is forced to divert funds to under-funded projects from other headings. “For example, we got an additional Rs7 billion to pay the bills of the works completed in the bridges,” said Thapa.

Lawmakers at the Finance Committee called for an end to the practice of agreeing projects under political pressure. Some lawmakers raised concerns over the same projects getting budget in a year and not getting a penny the next year.

Former finance minister Bishnu Poudel said projects are inducted under political pressure without necessary preparations. The tendency of awarding contract without a guarantee of funds also gives an opportunity for contractors whose performance is poor to answer that works failed to complete for want of money.

For example, Hari Narayan Rauniyar, owner of the defamed Pappu Construction, claims that many bridge projects it grabbed were delayed in the lack of timely payments.

Meanwhile, lawmakers also sought to end the practice of awarding contracts to the lowest bidder. Pradhan clarified that the issue could be addressed if the public procurement regulation was enforced strictly. Demand for additional performance guarantee has discouraged many contractors from bidding low, said Pradhan.

Published: 08-10-2018 07:31

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