National
Officials, firms agree to ascertain bidder’s capacity
The government and contractors have agreed on the need to determine the capacity of bidders before signing public contracts with them.Prithvi Man Shrestha
The government and contractors have agreed on the need to determine the capacity of bidders before signing public contracts with them.
Amid the growing trend of contractors grabbing multiple contracts and not completing the works on time, the Federation of Contractors' Association of Nepal (FCAN) on Monday formally demanded an end to the practice.
Given the poor track record of some of the big contractors, mainly the Pappu Construction and the Sailung Construction, authorities have initiated discussion among the stakeholders on the need for determining the bidder’s capacity.
There is no legal ground for denying contracts citing the projects a firm has taken up when the contractor is the lowest bidder. "One of the reasons behind incomplete construction projects is the contractor occupying more projects than what they can handle," states the declaration endorsed by the 20th annual general meeting of the FCAN. The document was made public on Monday.
The FACN is of the view that piling of contracts on a few contractors has put many small contractors out of business. There are more than 12,500 contractors in the country, according to the FCAN.
"A few contractors have got deals worth more than Rs20 billion each and they continue to get more contracts," said FACN President Rabi Singh.
Kalika Construction, Lama Construction, Rasuwa Construction, Sharma Construction, Swachchhanda Construction and Pappu Constructions are some of the firms which have grabbed a large number of public contracts each.
Of late, Pappu Construction is in the news for freezing a large number of unfinished projects. Government officials also agree that concentration of contracts on a few contractors has led to time and cost overruns in many projects.
"When a contractor gets contracts beyond their capacity, s/he cannot spend the time and resources required to complete the projects on time. So many projects have remained idle," said Madhu Prasad Regmi, secretary at the Public Procurement Monitoring Office.
There is also the tendency among the big contractors to forge joint ventures with small contractors to help them get government deals showing their technical and financial strengths.
"In such projects, big contractors don't work but they get commission from small contractors for helping them win the deal," said Singh.
Such trend will be discouraged once the bid capacity of the contractors is determined, said officials and contractors. On Sunday, the PPMO discussed with the FCAN ways to implement the new measure.
"We are also working out ways to ascertain the capacity of a contractor," said Regmi. "We are also going to discuss with the Inland Revenue Department the financial capacity of contractors based on their transactions."
On the other hand, the Department of Roads, which handles the largest number of development projects, has prepared the software to register the projects undertaken by a contractor.
Road officials hope the system will lead to the exact number of projects undertaken by a contractor and aid decision-making in the contract process.