Contractors blame late payment for delayThe government’s failure allocate adequate budget as well as timely payment to the contractors have delayed several projects.
The government’s failure allocate adequate budget as well as timely payment to the contractors have delayed several projects.
Delays in payments have given contractors, who are not doing well, to give some excuse. Many contractors are not doing any project work and misusing the advance payment to buy land and houses.
The Home Ministry has taken action against such truant contractors. Although police has arrested some of the under-performing contractors, the government too is guilty for not taking punitive action against contractors who are politically well connected.
Though contractors are at fault in many projects, the government’s failure to ensure budget and failure to pay them on time are the reasons for the slow progress, admit some government officials.
Currently, 926 bridges are under construction. These require Rs63 billion, but the government has allocated just Rs3.5 billion in the current fiscal year, according to Department of Road (DoR). For the next fiscal year, Rs2.88 billion has been allocated for the bridges to be built on roads.
“There has already been works worth Rs10 billion in the current fiscal year, but we could not pay the contractors in the absence of adequate funds,” said Mukti Gautam, spokesperson at DoR.
Recently, the bridge section of the DoR submitted the list of projects with additional budget demand of Rs6.8 billion to the Finance Ministry to pay contractors for completed works.
“We have received Rs2 billion so far and are in the process of making payments,” said an official of the bridge section of the DoR.
According to the department, they have failed to pay around Rs15 billion to contractors who have completed road projects.
Contractors have blamed that the government’s failure to pay on time as one of the reasons for the slow progress of many projects.
“Without timely payment, the contractors are forced to stop work which causes the delay,” said Ram Sharan Deuja, secretary general of Federation of Contractors’ Association of Nepal (FCAN). According him, the contractors are yet to receive around Rs55 billion from the government. Some payments are due since the beginning of the current year.
One of the reasons for the crunch to pay to the contractors is the government diverting funds meant for various projects, handled by the central government agencies, to local governments.
“There is no budget allocated under three budget headings-123, 147 and 148 which are related to regional and urban road projects handled by us because of reallocating budget meant for us to the local governments,” said Gautam.
“As the projects were not transferred along with budget to the local governments citing the lack of their capacity at the moment, we are now seeking transfer of budget to us from other headings to pay to the works undertaken in various projects with no budget.”
The failure to clear hurdles such as providing rights of the way, clearance of electricity and telephone pillars are other aspects that have affected the construction works.
Contractors admit that there are ‘bad apples’ among contractors who have misused advances to buy land and houses instead of the projects.
“There is a legal mechanism to pay the advance in two instalments. Only after seeing the progress in first instalments, second instalment is paid. But, due to collusion between the two sides, even those not working in the projects have received full advances,” said Deuja.