Government considers extending deadline for all construction contractsContractors say they need at least one year deadline extension and conducive environment for work to gather pace.
The government is considering extending deadlines for all of its construction contracts citing the Covid-19 pandemic and its impact on the entire sector.
Although the government in July decided to extend the deadline of the contracts signed during the lockdown period and for those that had their deadlines during the period, contractors complain that most of them couldn’t benefit from the provision.
According to them, contracts signed by few contractors were extended after the government’s decision as not many contracts met the criteria set by the government.
“Most contractors could not work during the lockdown period. So, our objective was to get the deadline for all contractors extended. But, the decision taken in July could not help in extending most of the contracts,” said Rabindra Nath Shrestha, secretary at the Ministry of Physical Infrastructure and Transport.
“We have again talked to the finance ministry to prepare a proposal to extend the deadline for all contracts irrespective of their timeline,” he added.
The extension in July was also granted as per a finance ministry proposal. But it had excluded contracts which were signed just before the lockdown began or the contracts whose deadline expired just after the lockdown ended on July 21.
Keshav Kumar Sharma, director general at the Department of Roads, also said that the government is ready to allow all contractors to extend their deadlines by six months.
Contractors have been saying that the last decision by the government was not practical as the deadline of some contracts could only be extended until the monsoon period and construction works could not be carried out at that time. Even after the lockdown ended, construction works continued to remain sluggish with contractors failing to mobilise workers.
“Hardly any contracts related to the construction industry were extended as per the decision of the government in July,” said Rabi Singh, president of Federation of Contractors’ Association of Nepal. “Considering the impact of the pandemic on all the construction works, it is necessary to extend the deadline for all the contracts.”
He, however, said that extending the deadline by just six months would not be enough. “The deadline needs to be extended by at least a year,” he said. “Even if the deadline is extended by more, we cannot work during the rainy season.”
Besides extension of deadlines, contractors have also sought a conducive environment to mobilise workers.
Construction work usually picks up in Nepal after major festivals such as Dashain, Tihar and Chhat are over. “But, it has been difficult for us to get construction materials due to the government's decision to temporarily bar crusher industries from engaging in extraction works,” said Singh.
The Home Ministry last month halted extraction works, except for the crusher plants which cater to the national pride projects citing violation of environmental standards.