Shailung Enterprises and Honiko Multiple Pvt. Ltd have been blacklisted for one year for failing to deliver chemical fertilisers as per contracts signed between the companies and the state-owned Krishi Samagri Company Limited.

Public Procurement Monitoring Office, the government agency responsible for monitoring the government’s procurement, blacklisted the two companies earlier this week as per the recommendation of the Krishi Samagri Company.

They have been blacklisted till March 5 next year. During the period of blacklisting, these companies cannot participate in any government bids as per the Public Procurement Act-2007.

“The Krishi Samagri Company had sent a request for blacklisting of the Shailung Enterprises after its failure to deliver fertilisers and we last week decided to blacklist the supplier,” said Rajesh Kumar Thapa, director at the procurement monitoring office. “Honiko was also blacklisted accordingly.”

This office needs to decide whether to blacklist any firm within six months after concerned the government entity makes a request for blacklisting as per the Public Procurement Act-2007.

The Krishi Samagri Company in early September last year had decided to terminate contract with these two companies after their failure to deliver the fertilisers in time and recommend the procurement monitoring office to blacklist them.

Shailung had moved the Patan High Court seeking interim order against the potential blacklisting and the high court issued the order as demanded by petitioners. But, the court didn’t continue the stay order after the next hearing which paved the way for the Shailung’s blacklisting.

“After the court’s lifted the interim order, we had recommended Shailung to be blacklisted in late September,” said Bishnu Prasad Pokharel, spokesperson at the Krishi Samagri Company.

Due to the failure of these two companies to deliver the fertilisers in time, farmers across the country could not get fertilisers for paddy cultivation last year.

It was the first time that domestic firms had participated in a bid to import chemical fertilisers.

“Their failure to deliver the fertilisers looked like chewing stone in the first bite,” said Pokharel.

Along with Shailung, Honiko too had no prior experience in supplying fertilisers.

But, the government-owned Krishi Samagri Company had awarded three contracts to the Shailung on different dates last year to supply a total of 80,000 tonnes of urea.

Similarly, Honika had a contract of supplying 25,000 tonnes of the urea.

“Shailung failed to deliver the fertilisers under all three contracts forcing us to terminate all three contracts with Shailung,” said Pokharel. “We also terminated the contract signed with Honiko.”

The Krishi Samagri Company had terminated the first contract with Shailung in early September, second in late November last year and third in early January this year.

Likewise, another local company—Muktinath Krishi Company—also failed to deliver the fertilisers contracted to supply 50,000 tonnes of chemical fertilizers.

It was awarded two separate contracts for supplying 25,000 tonnes of urea and another 25,000 tonnes of diammonium phosphate (DAP) by December 3 and December 4 respectively last year.

On January 11, the state-owned company had terminated its two contracts while terminating the third contract with Shailung on the same day.

“Local companies participated in the bid for the first time and won contracts for being the lowest bidders. But, they failed to accomplish the task probably due to their inexperience as well as moving slowly despite our urgent needs for fertilizers,” said Lamichhane. “They should have booked the fertilisers right after signing the contract but they only started to explore fertilisers in the international markets after signing the contracts.”

Shailung, in a press statement, had raised many issues related to supply chain disruption for delay in delivery.

According to Lamichhane, after the private companies’ failures to deliver the fertilisers, Krishi Samagri Company has started to include experience as one of pre-requisites to participate in bid for supplying fertilisers.

Shailung Enterprises, is one of the subsidiaries of the Shailung Group of Industries which emerged as one of the fast growing business groups in the country.

The group’s Shailung Construction is defamed for poor progress in construction projects including the delay in completing expansion work of Kalanki-Nagdhunga road, several roads in Kapan area of Kathmandu and Kamalbinayak-Nagarkot road.