The Department of Irrigation has started the process to blacklist Coastal-Pappu Construction, the joint venture involving the firm headed by suspended lawmaker Hari Narayan Rauniyar.

The move follows the termination of a major national contract—construction of the main and link canals and rehabilitation of headworks of the Dunduwa Irrigation System—of Sikta Irrigation Project, led by Pappu Construction, which has gained notoriety for significant delays in dozens of infrastructure projects across the country.

According to the Sikta Irrigation Project Office, the agency awarded a contract worth Rs980 million to Coastal-Pappu JV in July 2016. The contractor had got until the first week of October to complete the works but its progress was negligible.

“Only 6.9 percent of construction works was over at the time the contractor was supposed to complete the assignment,” Saroj Pandit, director general at the Department of Irrigation (DoI), told the Post. “There was no option but to terminate the contract.”

The DoI official said the agency will urge the Public Procurement Monitoring Office (PPMO) to blacklist the contractor. “We will dispatch a formal letter within this week,” said Pandit. The prime minister-led agency will then investigate the issue and decide whether to blacklist the company.

If the PPMO blacklists the Coastal-Pappu JV as recommended, the contractor will be ineligible for government contracts until the ban is revoked. According to Article 63 of the Public Procurement Act, the PPMO may blacklist a bidder, consultant, service provider, supplier, construction entrepreneur or any other person, firm, organisation or company from one year to three years depending on the seriousness of his/her act.

The Dunduwa Irrigation System project that would irrigate 16,000 hectares of land in Banke district accounts for more than a third of the 44,000 hectares that Sikta project would irrigate in total. Before terminating the contract, the project office issued a public notice to the Coastal-Pappu JV on October 15, asking it to clarify the delay. The notice had warned the contractor for “not completing the work as per the contract, sheer negligence, and wilful and deliberate inaction”.

The Coastal-Pappu has started work only on the seven kilometre section of the 23-km long canal. In a recent interview, Pappu Construction owner Rauniyar had told the Post that his company had completed 1.5km of the project and had done clay work on the remaining seven kilometres. He blamed the slow progress on a dispute over compensation to be paid for the land acquired and government authorities’ delay in felling trees at the site.

Rauniyar was suspended as a lawmaker after the Commission for Investigation of Abuse of Authority charged him with corruption. Such was the pace of works undertaken by the Coastal-Pappu that the Saudi Fund for Development that had pledged Rs2.4billion for building and renovating branch canals at the project threatened to withdraw its support in March, officials at the Ministry of Energy, Water Resources and Irrigation said.

A joint-secretary at the ministry said earlier that the Saudi Fund had warned of withdrawing additional funding until the Coastal-Pappu’s contract was terminated. The Saudi Fund is supposed to bear half the cost of the Dunduwa irrigation system.