Project-control issue stalls 1,500 road worksAround 1,500 regional road projects have come to a complete halt because they remain under federal government while their budgets are allocated to provincial governments.
Around 1,500 regional road projects have come to a complete halt because they remain under federal government while their budgets are allocated to provincial governments.
After Nepal promulgated federal system of governance, these road projects were to be handed over to provincial governments.
As these sub-national governments do not have institutional set up to handle these projects, the Department of Road (DoR) decided to complete the road projects and transfer them later.
However, current fiscal year budget allocated funds for these road projects under the provincial government. This complicates the procedure for DoR to execute the projects.
DoR Assistant Spokesperson Narayan Lamichhane said, “The department cannot tell contractors to continue project work as it neither has the budget and nor the authorisation to spend resources. The provincial governments cannot tell contractors to continue work as the projects are yet to be handed over to them.”
Contracts worth Rs18-20 billion have been awarded to several contractors to complete these roads, the department said.
“So far, the average progress of work in these projects stands at 30-40 percent,” said Lamichhane. Most of these are regional and urban roads and constructed under multi-year contract.
The department has not been able to make payments to the contractors.
DoR Director General Rabindra Nath Shrestha said, “Some contractors have asked for payments, but we cannot pay them without the availability of budget.”
The contractors have to deal with the DoR for payments, order variation, and time limit extension because they have signed contracts with the department.
However, the DoR does not have budget this fiscal year for these projects. Therefore, confusion prevails as who informs the contractor to continue project works.
Department officials said the contractors are entitled to make claims for payments from DoR because they signed contract with the department.
The DoR had planned to handover the projects to provincial governments after completing them because
they thought contractors would worry whether provincial governments would validate their deals with the department.
The DoR has no budget for these projects. It has urged the Finance Ministry to settle the issue of budgetary spending for these projects.
“The Finance Ministry has sought details on these road projects. We will shortly send the details,” said Shrestha.
Other DoR officials said contractors have to be reassured that the terms and conditions of contracts would be valid after the sub-national governments take control of their projects.
To this end, there are plans for a tripartite agreement between the federal, provincial governments, and the contractors for the ongoing road projects, according to officials at Ministry of Physical Infrastructure and Transport.
Ministry of Transport Spokesperson Rajendra Raj Sharma said, “We shall soon do tripartite agreements and hand these under-construction projects to the provincial governments.”