Erring builders face seizure of guarantee bond

  • Politically connected contractors among those on the hit list of the Department of Roads

Dec 5, 2018-

The Department of Roads is planning to confiscate an advance payment guarantee of contractors, including that of politically connected contractors, for poor performance on a number of road projects.

Himdung and Thokar Company owned by lawmaker Bahadur Singh Lama; Shailung Construction owned by Sharada Prasad Adhikari, who is also the landlord of ruling Nepal Communist Party Co-chairman Pushpa Kamal Dahal; and Swachchhanda Nirman Sewa of Jaya Ram Lamichhane, who had contested the Constituent Assembly elections in 2013 from the Nepali Congress, are among the contractors facing seizure of advance payment guarantee (APG), according to details obtained by the Post.

The government agencies provide mobilisation advance against the APG from the contractors at the banks. As per the Public Procurement Regulation, the government agency can provide a contractor up to 20 percent of total contract amount as mobilisation advance after the contractor signed an agreement of the government-funded projects. Contractors would often rush to collect the mobilisation advance, but do not work quick enough on the projects they have undertaken, officials at the Department of Roads said.

According to them, there is the tendency among contractors to use the advance payment meant for beginning work for other purposes such as land purchase for quick profits.

The Divisional Road Office, Kathmandu has decided to seize the APG, also known as bid bond, of several contractors, including the influential builders related to 22 different contracts. “We are sending letters to the banks to seize the APG of eight contractors who have handled 12 contracts in Kathmandu,” said a senior official at the department. “We have targeted the contractors who have failed to achieve at least 50 percent progress at the expiry deadline.”

According to the department, its divisional road offices have been seizing the APG across the country after the decision was made a month ago. “There are instances where of our divisional road offices have confiscated APG of non-performing and under-performing contractors on individual basis in the past. But this is the first time that we are acting the form of campaign,” said Rabindra Nath Shrestha, director general at the Department of Roads.

The decision was taken at the departmental level a month ago and a follow-up circular was sent to road offices on Sunday, Shrestha said. “We have been confiscating APG across the country after issuing the circular last month,” he added.

In Kathmandu, the road office has decided to seize APG of Swachchhanda/Panchakanya JV for poor progress in the Budhanilkantha-Muhanpokhara Road Expansion project. Although the deadline for completing the project expired on May 16, 2016, the contractor has completed only 80 percent of works related to wall, according to the road office.

Similarly, Diwa/Shailung JV has completed works on just half a kilometre of the 3.8km Sattale-Aakashedhara-Baluwakhani-Sundarwasti road project.

The project’s deadline expired on June 5, 2016.

Shailung Construction, which was supposed to complete the Akashedhara-Ram Mandir-Krishna Mandir Road project by July 15, 2016, is still carrying out works related to laying curbs and pipe.

Sapana/Himdung JV is facing the action for the delay on the Kageshwori-Chakrapath-Fikuri-Gagalphedi Road project. Also facing the action are Keureni Barahi, Gorkha Appropriate, White Gold and BSD Nirman Sewa, who between them are handing eight road projects under the Valley Urban Road Improvement Programme, according to the department.

Published: 05-12-2018 07:04

User's Feedback

Click here for your comments

Comment via Facebook

Don't have facebook account? Use this form to comment