KUKL annuls contract with a Chinese company

Kathmandu Upatyaka Khanepani Ltd (KUKL) has annulled a contract with Safbon Water Service (Holding) Inc (SWSHS), Shanghai, as the construction company failed to perform according to the contract.

The KUKL had awarded the Chinese company SWSHS with a contract to construct water purification plants in Sallaghari of Bhaktapur and Balkumari and Dhobighat of Lalitpur in 2017 January. It had agreed to construct processing plants to purify 68.70 million liters of contaminated water every day in two-and-a-half years. But the Chinese company failed to complete its task despite a number of extended deadlines. As of the latest revision, the company was supposed to complete construction of the structures by last July, a press note issued by the KUKL reads.  

The SWSHS has completed only 27.1 per cent of the construction work in five years and three months’ period, the press note reads, adding that the company has also not been able to deploy adequate numbers of workers at the site, failing to renew the insurance policy and ignoring the guidelines of the authority, according to Project Implementation Directorate of KUKL.

The Chinese company was awarded the contracts for an estimated cost of Rs 3.92 billion. But the company has received payment of Rs 772.70 million over the period. According to KUKL, it scrapped the deposit amount of Rs 490 million maintained by SWSHS as the company failed to comply with the signed agreement.

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.

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.

Home Ministry claims to take action against notorious contractors

Home Minister Ram Bahadur Thapa today claimed to take action against those contractors, who fail to complete their task within the deadline.
Addressing a press conference – on the occasion of completion of his 100-day in the cabinet – at the ministry today he warned of stern action against anyone who violates the law regardless of their status.
Though, he has been making claims of taking action against the erring contractors, two of the contractors – namely lawmaker Hari Narayan Prasad Rauniyar (chairman of Pappu Construction) of the ruling Sanghiya Samajbadi Forum-Nepal and Sharada Prasad Adhikari (chairman of Shailung Construction), who is the landlord of Nepal Communist Party (NCP) co-chairman Pushpa Kamal Dahal are in the news for their notorious acts.
The number of projects of these two contractors' have seen delays and time and cost over run and they have been misusing their power to get away with it.
“We have already made it clear that whoever violates the agreement and misuses the state coffers are criminals," he said, adding that the issue is under the jurisdiction of the law.
The government’s crackdown on non-performing and under-performing contractors will be continued, the minister asserted, though the contractors have been claiming that they have been targeted for political motive, and amassing the wealth like the government did with the transporters.
Asked on the on the gold smuggling case, the home minister said that ‘big fish’ of the gold smuggling racket have become restless as the investigation into the case nears its conclusion. "We have arrested some small and medium 'fish'," he said, being hopeful that the government will get hold of the big fish behind the gold smuggling.
Though, he admitted that some elements are trying to influence the ongoing investigation into the case, the case under trial at the Biratnager Court has been scripted to save what the minister said 'big fish'. The main accused including Chudamani Upreti aka Gore and DSP Shyam Khatri have surrendered to the court asking to save their life as they have been under threat. They however have denying their involvement in the gold smuggling and murder of Sanam Shakya claimed that they are innocent.
Minister Thapa said the deadline of the probe committee could be extended, if necessary, but the government is reaching a conclusion soon. The extended deadline of the probe committee is coming to an end on June 14.