Government extended deadline of sick projects by a year, but contractors say Covid-19 has stalled all worksPublic contractors say they need yet another deadline extension of at least six months to complete the projects.
Sharma and Company, a leading contractor, got a one-year extension to complete a bridge over Balan Khola in Saptari district two months ago.
The deadline for the bridge project, which is part of the Postal Highway, was extended until January end in line with the ninth amendment to Public Procurement Regulation on December 23 last year.
With the amendment, deadlines of over 2,000 sick projects have been extended, according to the Federation of Contractors’ Association of Nepal.
However, a Sharma and Company representative told the Post that the project is unlikely to be completed in time despite the deadline extension.
The project works have been halted since the government imposed a nationwide lockdown on March 24 to prevent the spread of novel coronavirus.
“We were accelerating the construction works to complete the project by mid-July and hand it over to the government,” Ramesh Sharma, managing director of Sharma and Company, said. “Due to coronavirus, we will be able to complete the project only by January next year, the extended deadline.”
Sharma and Company and Pappu Construction had secured a joint venture contract to build a 500-metre bridge in 2013. The project was supposed to be completed one and half years ago. But the work could not be completed after Pappu Construction kept the project idle.
Pappu Construction is owned by suspended lawmaker Hari Narayan Rauniyar is notorious for getting as many contracts as possible and keeping the construction project idle.
“Pappu was supposed to work in the field as per the joint venture arrangement,” Sharma said. “After it didn’t work, we have accelerated the work by taking over the project since April last year.” The company said that it has completed 70 percent of the project so far.
It is not the only project affected by the coronavirus crisis.
Several officials and contractors that the Post spoke to said that the construction works in almost all development projects had been stalled after lockdown.
Although the maximum deadline given to complete a sick project is one year, they said most of these projects were unlikely to be completed despite the extension of deadlines.
“Almost all contractors had mobilised their workforce and machines at their project sites after getting the contract extension,” Rabi Singh, president of the federation, told the Post. “But just as they were preparing to start their works, the lockdown was imposed.”
Even if the situation got back to normal, Singh says there is a little chance that the project works will resume at their full capacity.
“Fear of the coronavirus will continue after the situation normalises and it will be difficult to mobilise workers. So, I think the construction works in most of the projects will resume only after the Tihar festival this year,” he said.
Singh suggests that the government extend the project deadlines, even for sick projects.
The issue of sick contracts has wider spotlight after the Commission for Investigation of Abuse of Authority published a study report last year which showed that that a total of 1,848 projects worth Rs118 billion were incomplete and past their deadlines. These projects— some signed in 2009—were related to seven development focused ministries.
When the commission studied the progress of the sick projects this year, it had found that only onee third of the projects, which were declared sick, had been completed in a year. Following this discovery, the anti-graft body has repeatedly instructed the government agencies to either ensure that the works in sick projects are accelerated or terminate their contracts.
Meanwhile, the contractors tied to sick projects say that even those projects that were just a couple of months shy of completion would require a contract extension of at least six months, owing to the Covid 19 pandemic. Government officials also agree. “We cannot blame the contractors for delaying the projects as the situation is not under their control,” Shivahari Sapkota, spokesperson at the Department of Roads, told the Post. “There is no alternative to further extending the contract to complete the projects.”
The department had extended the deadlines of around 1,500 sick projects after the amendment to the Public Procurement Regulation.
The department officials said that works in almost all projects, including the sick ones, had come to standstill after the lockdown.
The setback has come at a time when the public construction work was picking pace. “Normally, construction works accelerate from February to June. But, we have been hit by the lockdown this time,” Sapkota said.
The government had allocated a budget of Rs 120 billion in this fiscal year. So far, it has managed to spend only 30 percent of the budget.