The government has started taking action against contractors who have failed to complete development works on time and those lagging behind the schedule agreed to in the contract.

On Thursday, Kaski Police arrested Surendra Basnet, owner of Justine Time Construction, a sub-contractor for blacktopping of the Kotre-Gagangauda section of Prithvi Highway. The Kaski District Administration Office (DAO) said he was caught after his company failed to complete works even within the extended deadline of mid-April while the delay affected people greatly.

“Basnet was released on Friday after he mobilised 20 workers and pledged to complete blacktopping of the road section by June 29,” said Taranath Adhikari, the Kaski chief district officer.

The Kathmandu-based Siruwa Construction is the main contractor of the project. The local authorities also asked the Home Ministry about the action to be taken against the main contractor of the Rs24.4 million deal.

The action comes a day after a meeting headed by Home Minister Ram Bahadur Thapa, which was attended by secretaries from the Prime Minister’s Office and the Ministry of Physical Infrastructure and Transport, chief of the security agencies, and mayors of Kathmandu and Lalitpur Metropolitan City, on Wednesday decided to take action against non-performing and under-performing contractors.

“As per the decision, we have written to the DAOs across the country to take action against the contractors,” said Ram Krishna Subedi, spokesperson for the Home Ministry. “We have also sought details from the DAOs about the status of government contracts in each district, whether works have been done as agreed, contractors and their address within a week so that necessary action could be initiated against non-performers.”

Non-performance and under-performance of contractors are the major problems development projects are facing at present. According to the 55th Annual Report of the Office of the Auditor General (OAG), 231 road contracts worth Rs3.86 billion remained incomplete as of fiscal year 2016-17. The recent OAG report has recommended cancelling contracts and forcing the contractor to complete works with own resources.

There is the tendency among contractors to utilise the advance payment meant for beginning work in other purposes such as land purchase for quick profits, according to officials.

“The contractors took advantage of political instability in the past. Such practices are no longer tolerable,” said Subedi.

As per Clause 113 of Public Procurement Regulations, the public entity can provide advance payment up to 20 percent of the contract amount against bank guarantee. Contractors also get 15 percent in overhead costs on top of the estimated cost. “Since the contractor gets enough funds to start work, there should be no reason for delays,” said Joint-secretary Hari Sharan Pudashaini.

The annual report of the Public Procurement Monitoring Office also outlined delays in project completion, deadline extension without valid reasons, cost escalation, poor quality of works and poor monitoring as problems in executing projects.