Contractors stage protest in front of PM's official residence

Wearing black armbands, the contractors today staged a sit-in in front of the Prime Minister's official residence at Baluwatar against the state’s repressive policy towards them.
The Federation of Contractor's Association Nepal (FCAN) is agitating against some of the provisions of the recently-issued Public Procurement Regulations-2076.
The contractors have put forth their 25-point including extending contracts to development projects, according to FCAN chair Rabi Singh. “We are forced to launch an agitation after the government failed to honour the commitments made in the past,” he said, adding that PM KP Sharma Oli himself had vowed to fulfill our demands. “We will boycott the government bidding, if our demands are not met as per the previous understanding reached with the prime minister.”
He also warned the government of halting the construction of development projects, if their demands were not met.
Singh also blamed the government for being repressive towards contractors in recent months by putting all the blames on them for every delay in projects. “The tendency of directly blaming contractors for delay in a project regardless of any cause has increased in recent times,” he said, adding that the government policy is discouraging them instead of supporting contractors and the construction industry.
Before going to premier, the FCAN also claimed that they asked Ministry of Physical Infrastructure and Transport (MoPIT) and also at the Public Procurement Monitoring Office to solve their problem but they were reluctant to address the issues.

Industrialists to hit street against arrest of Jyoti Group members

The Nepal Inc is taking to street against the arrest of industrialist and vice chairman of Jyoti Group Dr Roop Jyoti and the arrest warrant issued against industrialist and chair of the Jyoti Group Padma Jyoti.
Issuing a press note today, various commodity associations and district chambers, said that they have started protests across the country against the highhandedness of the government machinery and assault on private sector.
The intimidation of some people backed with the government machinery is a serious threat to the development of the private sector under the two-third majority stable and strongest government in Nepal’s history, a former president of Federation of Nepalese Chambers of Commerce and Industry (FNCCI) said, adding that the Nepal Inc has lost confidence on the government as it has been misled by some crook people.
The member organisations under FNCCI – including Nepal Automobile Dealers’ Association (NADA), Federation of Contractors’ Associations of Nepal (FCAN), Kathmandu Chamber of Commerce and Industry and Dairy Association of Nepal – have launched protests against the arrest of Dr Roop Jyoti and arrest warrant against Padma Jyoti, who is not only the former president of FNCCI but also a fair businessman compared to others.
Citing that such high-handedness against entrepreneurs is creating havoc in the business community and terrorising them, the private sector representatives asked the Prime Minister to interfere and ensure the business confidence.
While police arrested Dr Roop Jyoti last week from the Tribhuvan International Airport (TIA) on charges related to housing fraud, the Kathmandu District Court issued an arrest warrant against Padma Jyoti on the same case.
“The arrest of members of Jyoti Group has terrorised the entire private sector,” senior vice-president of FNCCI Shekhar Golchha said, adding that such activities will affect the business environment and discourage investment in the long run.
Earlier, Bigendra Krishna Malla had filed a case against Dr Roop Jyoti and entire Jyoti Group complaining that he had paid Rs 27.6 million in installments since September 2014 for a house at Bansbari in Budanilkantha to Landmark Developers, in which Jyoti Group has a stake but he still has to get possession of the house.

FCAN to protest against amended procurement law

The Federation of Contractors’ Associations of Nepal (FCAN) is protesting against the amended procurement law.
Organising a press meet here today senior vice president of FCAN Nicholas Pandey said that the contractors will take to the streets from November 25, if the government did not address their ‘genuine’ concerns. FCAN is open to sorting out the disputes through dialogue, though we are taking to street, if our demands are not met, he added.
Expressing reservations against some of the provisions in Public Procurement Regulations (eighth amendment)-2019, Pandey said that there are discriminatory provisions in the regulations that need to be revised. “According to the newly amended regulations, the contractor company will be penalized, if any project is not completed on time,” he said, adding that it has, however, remained silent on the action against concerned government officials and other stakeholders. “Based on our experience, the prime reason for delay in any project is caused by the government staffers and the lengthy process for approving various documents, not to mention corruption at every level.”
Though there is a need to change the rules in a timely manner to ensure quality of works, he said, frequently changing any regulation for someone’s vested interests puts domestic contractors at a disadvantage.
The timely completion of any project also depends on cooperation and coordination among other concerned stakeholders including government officials, engineers and locals, he said, adding that the regulations has largely ignored this fact and needs to be amended.
Likewise, FCAN has also claimed that in altering the procurement regulations, the government has given undue advantage to foreign contractors in the tender process. “The new regulations curb the opportunities for domestic contractors as various mega projects are being launched across the country.”
Immediate past president of FCAN Bishnubhai Shrestha, on the occasion, alleged that the banks and financial institutions seek commission of up to 1.4 per cent of bid amount from the contractors for preparing bank guarantee documents.

FCAN announces protest programmes against strict construction regulation

The Federation of Contractors’ Associations of Nepal (FCAN) is halting all construction works from July 17, if the government does not amend some of the provisions included in the recently passed Public Procurement Regulation (sixth amendment).
Organising a national convention of contractors from across the country in Kathmandu today, chairman of FCAN Ravi Singh also announced a series of protests programmes like returning the contract licence to the government and wearing black armband, until government hears them right.
The amended Public Procurement Regulation has a provision that states that a contract will not be extended for more than half of its original deadline to ensure that projects that are on the verge of completion would not be affected by the regulation, according to the government officials.
Likewise, the contractors have also protested other provisions of the amended regulation that restricts certain individuals from bidding projects. The provision states that any bidder – firm or individual – that faces a corruption case in court, according to the law, is barred from bidding for projects either as an individual or in the form of a joint venture unless the court gives a clean chit.
The contractors today also organised a rally in Kathmandu demanding changes in the regulation before a ‘special gathering’ that has agreed to protest and bring all the construction works to a standstill after July 17, if the government does not give them an ear.
Several development projects are facing time and cost overruns due to contractors’ ignorance and the government’s failure to clear the site and public protests, but the contractors have critisised the tough amendment that the government has introduced to force contractors to complete their work on time, with warning of contract termination.
Likewise, the government officials also said that the new provisions will be good for new projects, it could not be practical for the old ones, particularly those ones which are facing time overrun due to the failure of the government agencies themselves.
According to the government officials themselves, the provision of not extending the deadline – irrespective of who is responsible for the delay – could lead to the termination of many contracts.
According to a study by the Commission for Investigation of Abuse of Authority (CIAA), some 1,848 projects worth Rs 118 billion under seven ministries are incomplete and past their deadlines.
According to secretary at the Ministry of Physical Infrastructure and Transport Devendra Karki, “The provisions of the newly amended regulation is all right for the projects to be awarded in the future but the concern is about how to complete projects whose deadline has been extended beyond 50 per cent of original deadline due to genuine reasons like the government officials failing to clear site, public preventing the contractors to work and utility facilities not being cleared to start work.”
But there is also a risk that even projects that are over 90 per cent complete but have not completed as per deadline extension provision in new regulation would face contract termination as these projects will be delayed further for inviting fresh tender. “It will also increase the cost of the project because tender should be based on new price range,” said a higher government official.
The government officials and contractors both agree on the implementing this provision for the new projects. “The government should at least let the contractors finish the work they have started,” said the FCAN.
According to the amended regulation, the government agency should not call tender until the site is cleared, the budget is enough for providing compensation for acquired land and a report about Environmental Impact Assessment (EIA) has been approved, which FCAN also opines is right.

FCAN objects to Public Procurement Regulations

Federation of Contractors’ Associations of Nepal (FCAN) has objected to some points of Public Procurement Regulations (Sixth Amendment)-2075, recently issued by the government.
The federation has objected to some clauses of the Regulation, saying it would displace domestic entrepreneurs as it has given priority to foreign entrepreneurs, according to a press release issued by FCAN.
The release issued by FCAN general secretary Roshan Dahal reads that the government lost the opportunity of formulating construction-friendly acts. “The government has issued the Regulations against the suggestions of the FCAN and is trying to finish the domestic contractors,” it reads, adding that the goal, of ‘Prosperous Nepal, Happy Nepali’, could not be achieved due to such Regulations. Dahal said that the FCAN would be compelled to protest against the Regulations.

Average daily capital spending drops to Rs 41 million

Despite the two-third majority stable government, the capital spending has dropped down. Though, this is the time for paying bills of large amounts – mostly submitted by the contractors against works done in February and March – the government has spent only Rs 41 million in an average in the last 11 days, according to Financial Comptroller General Office (FCGO).
Though, the contractors have been blaming the government for withholding their payment without any valid reason, the government has only spent Rs  458 million capital expenditure in the past 11 days, which is is against the trend, as government payments would speed up in the months from May to June, during the last trimester. Of the total capital expenditure of Rs 313 billion, capital spending hovers below 40 per cent till date, while only two months for the fiscal year to end.
Not only the capital spending, the government has not been able to spend recurrent expenses, which are meant for regular salaries and adminitsrtive works, too. The government has spent Rs 724 billion, according to the FCGO.
The government has not made payments against works at Gautam Buddha International Airport, different sections of Mid-Hill Highway and other road projects bringing the development works to a halt as the contractors are cash strapped at this moment," said former president of Federation of Contractors Association of Nepal (FCAN) Jayaram Lamichhane. “The government has to immediately pay an estimated Rs 72 billion to contractors and different parties related to development projects,” he said, adding that lack of payment has been affecting their work, while banks and financial institutions have been facing further liquidity crunch and shortage of lendable cash. “It seems the Finance Minister is not aware of this gloomy picture of project management.”
While releasing mid-term report of the budget for the current fiscal year in March, Finance Minister Dr Yubaraj Khatiwada had said that he could not do much toward making timely payments to contractors though he had been receiving several complaints on the matter.

Low bidding makes construction sector infamous, quality questioned

Low bidding has made construction sector bad name and the quality has also been questioned, according to president of Federation of Contractors’ Association Nepal (FCAN) Rabi Singh.
The construction sector has been denigrated because of a rising trend of working at low bidding, he said, asking construction entrepreneurs to stop doing business with those contractors who are willing to work at low rates. "Quality of work is compromised when working for cheap."
"Low bidding also affects the project completion timeline," he said addressing the sixth district convention of contractors at Chautara. The convention concluded today.
Singh also admitting that there are some weaknesses in the construction sector asked the concerned authorities not to sign any project at extremely low rates. "The delayed budget finalisation by the government has hampered project works, which has caused repeated failures in meeting project deadlines," he said, adding that the contractors are compelled to halt work because of delayed budget finalisation, and the projects are delayed. He also asked for construction sector-friendly public purchase law.
“Contracts up to Rs 50 million must be handed to local level contractors, while contracts exceeding this amount but less than Rs 150 million must be given to provincial level contractors,” Singh said, adding that contracts exceeding Rs 150 million must be given to large-scale contractors. "Likewise, both the international and national contractors must be given the right to handle contracts over Rs 1 billion."

Locals ready to invest on Ktm-Hetauda tunnel

The locals in Makwanpur have agreed to invest on the dream project that is going to be the first tunnel road in the country.
"We are ready to invest Rs 10,000 as shares," they said, during the mass meeting at Markhu of Makwanpur.
"It is an example of how private sector can be development partner by investing on infrastructure," said immediate past president of Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and coordinator of the Users’ Community Group Kush Kumar Joshi.
The proposed fast track road with 3.5-km long tunnel will cost Rs 20 billion," he said, adding that the 50-km long road will connect the Valley with the Southern plane of Hetauda.Currently, Hetauda is linked with Kathmand by two highways — one 227 km and the other 133 km. "But the proposed tunnel fast track will have only 50 km and takes only an hour," Joshi added.
The community group has also formed Nepal Purbadhar Bikash Company (NPBC) with 86 local and 76 entrepreneurs as its promoters. "We have applied to the government for the licence," said one of the promoters of NPBC and Federation of Contractors' Association of Nepal (FCAN) president.
The VDCs in Makawanpur and Kathmandu are investing for a proposed 50-km Kathmandu-Hetauda fast track road that will not only reduce driving length between the two cities to one hour by consuming less fuel but also help reduce population concentration in Kathmandu Valley.
Though, Hetauda-Kathmandu aerial distance is only 37 km, the present road – Tribhuwan Highway – that links the two cities is 133-km. Currently, travellers have to spend more than eight hours to reach Hetauda from Kathmandu, and pay high fares burning the petroleum products that have threatened the country's total financial stability.
"We are also inviting Non-Resident Nepalese (NRNs) to invest on the dream project," Joshi said, adding that the project will be completed in four years and in next five years the investment will be returned.
The project will be operated in BOOT model and the local bodies will be the share holders.
"By the side of the proposed fast track many satellite cities can also be developed that will reduce the population concentration in the overcrowded Valley,” Joshi said, adding that a preliminary study showed that a tunnel – of a length of three-and-a-half kilometers – has to be constructed in a section of the proposed fast track at Gadhi Chour-Chisapani.
The idea of the constructing fast track road has been floated since Girija Prasad Koirala became the Prime Minister post 1990 movement but could not be materialised. "But this time, the locals are committed to construct the dream highway, Lamichhane — who also hails from Chitlang — said, adding that the locals whose land will be used for road and labourers will get share in the company.