Nine firms blacklisted by Public Procurement Monitoring Office in the first 45 days of this fiscal yearMore firms are likely to fail to complete projects on time despite their deadlines being extended by a year.
The Public Procurement Monitoring Office has blacklisted at least nine construction and supply companies in the first one and a half months of the current fiscal year, higher than average monthly blacklisting in the last fiscal year.
A total of 51 companies, an average of 4.25 firms were blacklisted in a month in the last fiscal year 2018-19. According to the procurement monitoring office, another seven to eight firms are set to be blacklisted in the near future.
“There is a growing sentiment that the companies that fail to fulfil their responsibilities should be penalised,” said Yagyaraj Koirala, spokesperson for the procurement monitoring office. “So I think the number of blacklisted firms might increase in the new fiscal year compared to previous years.”
According to him, the eighth amendment to public procurement regulation could also lead to a substantial rise in blacklisted firms. The regulation amendment on August 1 has allowed the contractors to get contract extension whose original deadline had already expired by one year starting from June 6, irrespective of who is responsible for the delay in works.
But if the contractor fails to complete the work until June 5 next year, the government authority will have to seize the performance guarantee and blacklist such firms after recovering the potential extra cost to be borne by the government for delay in works from such contractors, the regulation states.
“Assuming that not all the contractors who get contract extension may complete the works until June 5 next year, there could be a substantial rise in the number of blacklisted firms in the current fiscal year,” said Koirala.
During the first one and a half months of the current fiscal, firms including Crystal Nirman Sewa, Daunne Engineering Builders, Huizhou Zhongcheng Electronic Technology, Shenzhen Farad Electric Co, Khemtara Construction, Somu Construction, JB ENT Pvt Ltd, Hilara Construction and Lokbir/Narsingh/Kalapani JV have been blacklisted.
As per the public procurement law, the blacklisted firms are barred from participating in bids for up to three years.
The procurement monitoring office has also barred Raman-Pappu JV from participating in any government bids, citing a possible negative impact on the government projects. It, however, has not been blacklisted.
The Postal Highway Directorate had earlier written to the procurement monitoring office to blacklist the firm on July 5. The Supreme Court then issued an interim order in favour of the company on July 8. But on July 31, the court vacated its interim order, paving the way for the procurement monitoring office to blacklist it.
In the last fiscal year, some influential firms were also blacklisted, including the infamous Pappu Construction owned by Hari Narayan Rauniyar, a suspended lawmaker, for failing to complete a part of Sikta Irrigation Project on time.
The Commission for Investigation of Abuse of Authority had charged Rauniyar with corruption for substandard work in a bridge in Bardiya, resulting in his suspension.
Similarly, Kalika Construction, owned by former Minister Bikram Pandey, has faced corruption charges from the anti-graft body for substandard work at Sikta Irrigation Project.
In recent years, the number of blacklisted firms has been on the rise. In the fiscal year 2015-16, 18 firms were blacklisted firms stood at 18. The number rose to 47 in the fiscal year 2016-17, followed by 52 in 2017-18.