Over 2,000 projects could be halted

Kathmandu , June 5th 2019

The possibility of over 2,000 ongoing projects under the multi-year contract modality being affected has increased, as contractors have warned the government to immediately amend some of the provisions that were included recently in the Public Procurement Regulation (sixth amendment).

The Federation of Contractors’ Associations of Nepal (FCAN) has expressed strong reservations against the newly amended regulation stating that the government has unjustly targeted the contractors. The federation has also stated that they will halt construction works of the projects if the government fails to address their grievances.

The government recently amended the guideline and included a provision which mentions that if any contractor is found to be involved in any corruption, then the contractor will not be allowed to bid for any project. Another provision states that if at least 50 per cent of the works of a project are not completed within the deadline, then the project contract will be automatically cancelled.

The government has also made it mandatory for all contractors to acquire a Permanent Account Number.

Moreover, the amended guideline also mentions that if a construction company has been established in partnership and if any member is found to be involved in any irregularity, then the company will not be allowed to participate in any future tender and if it is involved in construction of any project, then the contract for that project will also be immediately terminated.

Nicholas Pandey, senior vice-president of FCAN, said that if the government does not amend the guidelines, they will launch a strong protest programme. “Coordination among concerned authorities is necessary for any project to be completed on schedule, which the new regulation has largely ignored,” he said, adding that it is unjust to penalise only the contractors if the project is not completed on time.

“Rules and laws must be amended in a timely manner to ensure the quality of works and also to make sure that they are completed on time,” said Pandey. “But the recent amendment has put domestic contractors at a disadvantage.”

Pandey further claimed that the amended guideline has provided undue advantage to foreign entrepreneurs in the tender process.

“The government has lost the opportunity of formulating a construction-friendly act, as it has issued the regulations against the suggestions provided earlier by FCAN and concerned agencies.”

Moreover, contractors have also stated that the amended guideline has only talked about penalising contractors but has not provided any viable solution to overcome the problems.

Meanwhile, Begendra Raj Sharma Paudyal, secretary of Public Procurement Monitoring Office (PPMO), under the Office of the Prime Minister and Council of Ministers (OPMCM), informed that they will strictly enforce the amended regulation.

“We have been given a clear mandate to enforce the new guideline and there is very little chance of it being amended again.” He, however, added that the PPMO has forwarded the concerns raised by the contractors to the OPMCM.

“If OPMCM amends any provision then we will follow the same, otherwise it will be strictly applied as it is at the moment,” Poudyal added.

Shiva Hari Sapkota, joint secretary at the Ministry of Physical Infrastructure and Transport, said the provision will be put into practice as per the law. He further said that nearly 1,000 projects are related with the MoPIT and the remaining projects are related to the Ministry of Energy, Water Resources and Irrigation and the Ministry of Urban Development, among other ministries.

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