Mid-Hill Highway office seeks clarification from contractors related to 15 projects

  • Erring builders have been warned of blacklisting and contract termination

May 18, 2019-

The Mid-Hill Highway Project Directorate (Eastern) has sought clarifications from contractors of 15 different road sections and bridges along the highway for their poor performance.

The directorate has even warned that they could get blacklisted or face termination of contracts.

Some of the leading contractors facing the warning are Rasuwa Construction, owned by Nepali Congress lawmaker Mohan Acharya from Rasuwa-1, and Biruwa Construction, owned by Pemba Lama Sherpa, vice-president of the Federation of Contractors’ Association of Nepal.

Raswua Construction is involved in four projects along the Jorsal-Tamor-Sakranti-Myanglung road sections in partnership with Danfe Construction and Elite Construction and another two in partnership with SBA Construction.

Biruwa Construction, which has a joint venture with Galwa Construction, is involved in Osama Khola Bridge, Khanduwa Khola Bridge and Sukhkha Khola Bridge projects.

Other contractors include Kantek/Gauri Parbati/Koshi and Neupane JV; Bharat Construction/Mainachuli/Siddhisai JV; Koshi and Neupane Nirman Sewa; Mainachuli/Siddhimai, Surya Construction, Galwa Raphina JV and Chyangmila Galwa JV.

In the notice, the directorate has asked the contractors to come up with clarifications for the delay in the works as well as acceptable plans of action, including updated work schedule and compatible reliable resources mobilisation within seven days.

“Otherwise, this notice will be the final and contracts will be terminated,” it  reads.

They will also face additional action such as recommendation to the Public Procurement Monitoring Office for blacklisting of the firms.

The office has also warned that their security deposits would be confiscated and they would have to pay the additional cost to be borne by the project as a result of contract termination.

Likewise, costs related to the security of the project site and additional expenditure to be made by the government agencies will also be recovered from the contractors, the notice says.

The Mid-Hill Highway, also known as Puspalal Highway, is one of the national pride projects that the government has accorded top priority.

The 1,776-km road connecting Chiyabhanyang in Panchthar district to Jhulaghat in Baitadi district is expected not only to improve the livelihood of people along the highway but also to discourage the existing migration trend to southern plains.

However, the progress in a number of projects has remained poor as contractors failed to work in a time-bound manner, according to the project office.

The Mid-Hill Highway office said that the progress in these 15 projects handled by different contractors has remained poor and repeated instructions of the highway office were ignored.

When asked about the warning by the Mid-Hill Highway Office, Mohan Acharya of Rasuwa Construction said although his company is a joint venture partner, it is not working in the field.

“It is a long-held tradition that contractors become joint venture partners without actually working in the field,” he told the Post.

There have been calls for barring such practice of involving big contractors just to win contracts.

Contractors themselves admit that big contractors receive certain commission for securing contracts for the smaller joint venture partners.

With the recent revision in the Public Procurement Regulation, the government has made it mandatory for all the joint venture partners to involve in the projects and put restriction on handing over the responsibility of construction to any single joint venture partner.

The latest warning from the Mid-Hill Highway has come at a time when there is a widespread concern over poor progress in the implementation of development projects. 

Concerned by the repeated delays leading to time and cost overruns in a number of important projects, the Commission for Investigation of Abuse of Authority not only conducted a study about the status of sick projects but also issued a work plan to improve the public procurement so as to avoid cost and time overruns.

The CIAA study conducted last year showed that a total of 1,848 projects with the contract value of Rs118 billion were incomplete and past their deadlines. Moreover, the deadlines of 1,032 projects have not been extended. 

In the work plan named ‘Public procurement and development program reform work plan 2075’, the CIAA has asked the government agencies to conduct procurement process only after conducting need assessment and determining technical specification of the goods and equipment. The anti-graft body has asked the government offices to award contract only after clearing the project sites.

Officials of the Department of Roads claim that they are tightening the noose around the under-performing contractors by imposing penalty and forcing them to complete the projects without extending the deadline. There is also the tendency among contractors to receive advance payment and using the amount in their personal works, abandoning the development projects. “In order to discourage such tendency, we have adopted the policy of not to advance payment more than 15 percent of cost in two instalments,” said Keshav Kumar Sharma, director general at the Department of Roads. As per the public procurement regulation, the government agency can advance up to 20 percent of the project cost in two instalments.



Published: 19-05-2019 07:00

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