Officials say tough public procurement regulation should not affect projects nearing completion

  • Contractors organise a rally in Kathmandu demanding changes in the regulation
- PRITHVI MAN SHRESTHA, Kathmandu

Jun 6, 2019-

Government officials have called for some adjustments in the amended Public Procurement Regulation that has a provision that states that a contract will not be extended for more than half of its original deadline. The provision has come into place to ensure that projects that are on the verge of completion would not be affected by the regulation.

This call for adjustment from government employees comes at a time when contractors have been protesting against a number of provisions of amended regulation—including this one.

Contractors on Wednesday organised a rally in Kathmandu demanding changes in the regulation. They also organised a ‘special gathering’ in the Capital to determine how to respond to the government’s move.

As several important development projects are facing time and cost overruns due to a number of reasons—including contractors’ ignorance and the government’s failure to clear the site and public protests—the government has introduced the tough measures as an effort to force contractors to complete their work on time, with warning of contract termination.

But officials of development-focussed ministries say that although the new provisions will be good for new projects, it is not practical for the old ones, particularly those which are facing time overrun due to the failure of the government agencies themselves.

According to them, the provision of not extending the deadline—irrespective of who is responsible for the delay—could lead to the termination of many contracts.

The government does not have exact data on how many contracts are affected by the provisions of the regulation. But a study by the Commission for Investigation of Abuse of Authority of the various contracts related to seven ministries found that as many as 1,848 projects worth Rs118 billion are incomplete and past their deadlines.

These sick projects were not completed by the original deadline and many of them have not been completed even after deadline extension by more than 50 percent of the original deadline.

“All other provisions of the newly amended regulation is all right for the projects to be awarded in the future,” said Devendra Karki, secretary at the Ministry of Physical Infrastructure and Transport. “But we are concerned about how to complete projects whose deadline has been extended beyond 50 percent of original deadline due to genuine reasons—such as our offices failing to clear site, public preventing the contractors to work and utility facilities not being cleared to start work.”

“We have asked for measures that would not affect the projects, which is getting delayed due to genuine reasons during the internal meetings of the government officials,” Karki said.

According to officials, there is a risk that even projects that are over 90 percent complete but have not completed as per deadline extension provision in new regulation would face contract termination.

“In such case, projects will be delayed further for inviting fresh tender. It will  also increase the cost of the project because tender should be based on new price range,” said Sunil Das, director general at the Department of  Water Supply and Sewerage.

According to him, there are around two dozen drinking water projects under his department that are facing the risk of contract termination due to prohibition of extending deadline beyond 50 percent of original deadline. “We have asked the contractors to complete the projects within the latest extended deadline citing possible contract termination,” he told the Post.

Officials said there would be no problem in implementing this provision for the new project, as both government offices and the contractors would be ready mentally to do the work as per the new regulation.

As per the amended regulation, the government agency should not call tender until the site is cleared, the budget is enough for providing compensation for acquired land and a report about Environmental Impact Assessment has been approved. The possibility of contract termination due to provision deadline extension is the biggest concern of the contractors as well. “The government should at least let the contractors finish the work they have started,” said Bishnubhai Shrestha, immediate past president of the Federation of Contractors’ Association of Nepal.

The contractors have also protested other provisions of the amended regulation. One such provision restricts certain individuals from bidding projects. The provision states that any bidder—firm or individual—that faces a corruption case in court as per the law is barred from bidding for projects either as an individual or in the form of a joint venture unless the court gives a clean chit.

The provision has barred Kalika Construction and Pappu Construction and their owners—former minister Bikram Pandey and suspended lawmaker Hari Narayan Rauniyar respectively—from taking part in any government bids. But contractors are of the view that nobody should be barred from taking part in a bid until one is proven guilty in court.

Published: 06-06-2019 10:26

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