The Public Procurement Monitoring Office has imposed a ban on Raman Construction, a joint venture partner of Chinese contractor Guangdong Yuantian, which recently won a Rs6.16 billion contract to execute the civil works of the hydropower component of the Bheri Babai Diversion Multipurpose Project.

Raman Construction was banned by the procurement office on Tuesday based on its investigation and the verdict of the Supreme Court. The company has been forbidden from taking new public contracts along with controversial company Pappu Construction for poor performance in the Postal Highway Project.

However, as the construction company signed an agreement with the Bheri Babai project before it was banned, it will be allowed to mobilise workers at the Bheri Babai construction site, despite the procurement office highlighting the possibility of negative consequences if Raman was given responsibility for new projects.

“As per the project office’s understanding, the contractor can still legally undertake the task at the site as it had already entered into an agreement with us before the ban,” said Krishna Prasad Upadhyay, spokesperson for the Bheri Babai Diversion Multipurpose Project. “The work will move ahead as planned.”

Also, the Public Procurement Act does not have a provision prohibiting a non-performing contractor of one project which has been banned or blacklisted from undertaking other projects for which it has already signed an agreement.

However, legal experts say that not barring a non-performing contractor from the other projects it is involved in serves a practical purpose, and should not be viewed as a legal loophole.

“Banning the contractor from multiple projects would delay work at multiple sites even when it is performing satisfactorily in other projects,” said Semanta Dahal, an advocate. “Also, non-performance should be treated as per the clauses of individual contracts rather than umbrella laws that can hinder progress of multiple projects.”

In December, the Civil Aviation Authority of Nepal had also decided to sign a contract to lengthen the runway of Tribhuvan International Airport with a Nepali joint venture, Kalika-Tundi, under similar circumstances.

Kalika Construction’s chairman and former minister Bikram Pandey had been accused of substandard construction that led to repeated collapses of the main canal of the Sikta Irrigation Project, even before the aviation authority awarded the runway extension project to Kalika-Tundi.

Three months after crossing a major milestone, the Bheri Babai project in July had announced its decision to appoint Guangdong Yuantian-Raman joint venture to execute the civil works under the hydropower component, taking the national pride project into the second phase.

The Nepali-Chinese joint venture has been now assigned to construct the headwork, surge shaft, penstock and powerhouse.

One of the major strategic projects of the country, Bheri Babai is expected to ease the food crisis in the mid-western region by increasing agricultural yield.

The project is expected to make an indirect financial contribution of Rs3.1 billion annually to the state through irrigation and a direct revenue contribution of Rs3.23 billion annually through electricity sales.

The tunnel, which was built one year ahead of schedule, will transfer water from the Bheri River to the Babai River at the rate of 40 cubic metres per second. The water will be used to provide year-round irrigation to 51,000 hectares of farmland and generate 46 megawatts of electricity.

The estimated cost of the hydropower component and other requisite civil structures stands at Rs15 billion.

Earlier, project officials said they have planned to mobilise the contractor within August and complete the project by the fiscal year 2022-23.

According to Upadhyay, the project office is now in the final stages of inviting bids for the hydro mechanical and electro mechanical components which entail installing equipment in the powerhouse including generators and turbines.

“The project office will call for bids once the contract documents are approved by the Ministry of Energy, Water Resources and Irrigation,” said Upadhyay.

Due to delays in contractor appointment and lack of resources, the estimated cost of the project, which was inaugurated by the late Sushil Koirala in 2015, had ballooned to Rs33 billion, double the original estimate of Rs16 billion.

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