Nepal Army has issued a letter of intent to a controversial South Korean firm to provide consultation services to design and supervise the construction of the Kathmandu-Nijgadh expressway at a time when the country is in a lockdown to contain the spread of the contagious Covid-19.

In doing so, the army, which was assigned the responsibility to build the project of national pride in May 2017, has not only breached public procurement guidelines, but also ignored warnings issued by the Public Procurement Monitoring Office, officials say.

Five international firms, which had responded to the army’s call for expression, were in contention for the contract. Two firms—Singapore-based consortium of Meinhardt Group and South Korea-based Yooshin JV—were short-listed after screening.

On March 31, the office of the Kathmandu-Tarai/Madhesh Fast Track (expressway) project issued a letter of intent to the Yooshin Engineering Corporation, Korea, Korea Expressway Corporation, Korea and Pyunghwa Engineering Consultants Ltd , Korea, the same day the sealed bids by the two groups were opened.

“Our office received complaints from other bidders on the same day [March 31] the letter of intent was issued,” said Rajesh Kumar Thapa, an official at the Public Procurement Monitoring Office.

According to section 37 of the Public Procurement Act, the public entity procuring a good or service may hold negotiations with the proponent selected over the contract’s terms of reference and scope of the proposed services, progress report, and facility to be made available by the public entity.

“We warned the army not to issue the letter on the very day the bids were opened,” Thapa told the Post. He said that army officials completed the negotiations process, which normally takes 15 days to complete, in a matter of hours, and this was “unusual” and “unnatural.”

The “instruction to the consultants” section on the bid documents issued by the army clearly states that the selected consultant shall be informed regarding the contract negotiations within at least 15 days.

According to a complaint filed at the Public Procurement Monitoring Office obtained by the Post, the Singapore-based group reportedly quoted Rs 80 million less than the Korean JV for its consultancy service. Public procurement rules say that the contract has to be awarded to the lowest bidder.

The complaint also raised suspicion over the army’s claim that it completed negotiations with the Korean firm within three hours of opening the bid documents. The country is under a lockdown, and there aren’t any international flights coming into Nepal, how did the army manage to negotiate the terms of the contract with the representatives of the Korean firm that quick? The complaint asks.

The complaint further states that the authorised stamp of Yooshin JV was missing on its financial proposal, except on the first page. The public procurement rules of Nepal government require the signature of the bidder’s authorised representative and an authorised stamp on each page of the financial proposal, said the complaint.

In addition to that, it has been found that the South Korean company has been black-listed by the Assam state government and it faces a court case in Kenya for not completing several projects on time.

A director at the procurement monitoring office told the Post that it was nearly impossible to negotiate the terms of the contract within a few hours. “We will look into the matter after the lockdown is over,” the official said on the condition of anonymity as he wasn’t authorised to talk to the media.

But Nepal Army said it has fulfilled all requirements while issuing the letter of intent and if anyone has reservations, he/she can file a complaint at the Public Procurement Monitoring Office. Brigadier General Bigyandev Pandey, spokesperson for the army, said, “If anyone is not satisfied with the selection process, they are free to file a complaint at the public procurement monitoring office and its tribunal.”

“If the office asks us to terminate the contract over valid grounds, we will terminate it. But as of now, we have completed all required processes,” he said. “We received some questions from some of the bidders, which we have already responded to.”