Nepal | September 21, 2019

1,848 projects worth Rs 118 billion fail to meet completion deadline: CIAA

Himalayan News Service

Kathmandu, January 28 

A study carried out by the Commission for the Investigation of Abuse of Authority has found that 1,848 development projects worth Rs 118 billion have failed to meet the completion deadline stated in the original contract.

The CIAA conducted the study after seeking relevant documents related to ‘sick contracts’ from eight departments, authorities and companies under seven development-related ministries.

The seven ministries are Ministry of Finance; Ministry of Physical Infrastructure and Transport; Ministry of Urban Development; Ministry of Energy, Water Resources and Irrigation; Ministry of Water Supply; Ministry of Federal Affairs and General Administration; Ministry of Culture Tourism and Civil Aviation; and Ministry of Communications and Information Technology.

Of the total 1,848 contracts, contract deadlines have not been extended for 1,032 (55.84 per cent) contracts, the study found. The government has already released around Rs 24 billion in advance payment to contractors of the aforementioned projects as per the practice of releasing 20 per cent of the total contract price to contractors after the signing of the contract.

The CIAA in a statement issued today said the 1,032 contracts were not in continuation legally as their contract period had not been extended. The deadline for most of the advance payment guarantee issued in the name of authorities concerned for the advance payment has already expired. The performance guarantee, an integral part of the contract agreement, worth around Rs 6 billion (5 per cent of the total contract value) is at risk because of the non-extension of contracts, the CIAA said.

The government offices concerned extended contract deadlines time and again for the same contracts showing different reasons resulted in mistakes in setting contract deadlines and carelessness in adherence to contract conditions, according to the CIAA. “Due to failure to complete projects on time, huge direct/indirect losses were caused to the state,” read the CIAA statement.

 


A version of this article appears in print on January 29, 2019 of The Himalayan Times.


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