Contractors siphoned off Rs. 24b from sick projects

Kathmandu, Jan. 29:

At least 1,032 infrastructure development projects managed by different eight government agencies are experiencing time overrun but their term extension has not been made.

According to a study of the Commission for the Investigation of Abuse of Authority (CIAA), about 1,848 tender agreements amounting Rs. 118 billion were not completed in their announced time-frame while about 55.8 per cent contracts weren’t extended.

 But the contractors have siphoned off about Rs. 24 billion as 20 per cent mobilisation cost.

“The contractors have got the payment of the initial 20 per cent of the contract amount but there has been zero or nominal progress in most of the projects which means the term of the advanced payment guarantee has been finished,” read the report.

People and the country are experiencing huge losses due to the incomplete infrastructure projects as the chances of infrastructure’s contribution to the society, economy and country have been killed.

According to the rules, if a contractor stops working for more than 30 consecutive days and does not follow the action plan approved by the managing agency, it would be a ‘fundamental breach of the contract’ and work should be expedited when there is poor progress.

“But the responsible agencies have turned blind eyes to the mismanagement and delay at the project. As the contracts had been tendered out without proper procurement plan, many of them are left in lurch,” said the CIAA.

There had been term extension for eight times in a project, which exhibits the negligence on the part of the government agencies and the officials in preparing the tender document, deciding the contract period and terms of reference.

Nepal Electricity Authority has extended the term of a project twice the time of its defined period while a project which was supposed to be completed in two years six months couldn’t be completed in seven years and six months.

All the rules of contract – time, quality and cost control and finishing– have been breached.

The study has also found that there was a trend of finding scapegoat and excuses when there was a poor performance in the project.

The Department of Roads (DoR) under the Ministry of Physical Infrastructure and Transport has 906 incomplete projects under its jurisdiction, Department of Urban Development and Building Construction (DUDBC) under the Ministry of Urban Development has 442 projects and Department of Water Resources and Irrigation (DoWRI) under the Ministry of Energy, Water Resources and Irrigation has 235 incomplete projects.

Similarly, the DoR, DUDBC and DoWRI have 623, 171 and 94 projects respectively without term extension as well.

Other agencies having large number of sick projects are the Department of Local Infrastructure under the Ministry of Federal Affairs and General Administration, NEA under the MoWRI, Civil Aviation Authority of Nepal (CAAN) under the Ministry of Culture, Tourism and Civil Aviation, Nepal Telecommunication Company under the Ministry of Communication and Information Technology and Department of Water Supply and Sewerage (MoWSS) under the Ministry of Water Supply.

Published in The Rising Nepal daily on 30 January 2019.