The government has blacklisted Raman-Patel JV, the construction company responsible for building the dam under the Sunkoshi-Marin Diversion Multipurpose Project, for failing to complete the work on time.

The Public Procurement Monitoring Office issued a notice on Wednesday, saying the company has been blacklisted for three years.

Patel is an Indian construction company. According to the Sunkoshi-Marin Diversion Multipurpose Project, the contract for the construction of the dam, powerhouse and other civil structures, as well as the supply and installation of gates and hydro-mechanical equipment, was terminated due to poor progress.

The company had secured the contract in January 2023 for Rs14.07 billion, with a target to complete the dam construction on the Sunkoshi river within four years and seven months.

After 60 percent of the contract period had elapsed, physical progress stood at only 11 percent. On November 11 last year, the project issued a 15-day notice to terminate the contract after work on the dam, powerhouse and related structures failed to move forward.

The project later confirmed that the contract had been terminated in line with the notice. Following the cancellation process, the project also moved to confiscate bank guarantees worth Rs3.60 billion deposited by the company, including Rs2.40 billion in performance guarantees and Rs1.20 billion in advance payment guarantees.

The company filed a writ petition at the Supreme Court on November 25 against the project’s decision, naming then Minister for Energy, Water Resources and Irrigation Kulman Ghising, the ministry, the Department of Water Resources and Irrigation, the project office and consultants among the defendants.

On November 26, a single bench of Supreme Court Justice Tek Prasad Dhungana issued an interlocutory interim order, directing authorities not to implement the contract termination and bank guarantee confiscation.

The bench also issued a show-cause order and summoned both sides for discussion on whether the interim order should continue. A hearing was scheduled for February 9.

The Supreme Court, however, revoked the interim order on February 10, clearing the way for authorities to confiscate the bank guarantees.

A joint bench of Justices Hari Prasad Phuyal and Nityananda Pandey ruled that the earlier interim order would not continue. The decision paved the way for the confiscation of the Rs3.60 billion bank guarantees.

The banks providing the guarantees include Global IME Bank, Prabhu Bank, Machhapuchchhre Bank, Prime Commercial Bank and Kumari Bank. The project said it has already recovered the advance payment guarantee amount.

The project had moved to terminate the contract after tunnel excavation and water testing were completed, while the separately awarded dam construction contract and associated works remained unfinished.

According to Prem Hari Parajuli, senior divisional engineer at the Department of Water Resources and Irrigation, the cost estimate for a fresh contract has already been approved. He said the bid documents prepared for the new contract are currently at the department for final approval.

Meanwhile, the Public Procurement Monitoring Office has also blacklisted Gauriparbati/Dev and Sair/Bhumi JV, a contractor working under the Postal Highway Directorate’s project office in Itahari, for two years.

The office has also issued notices blacklisting more than half a dozen other construction companies for one year each.

According to the Public Procurement Monitoring Office, blacklisted contractors will not be allowed to participate in new bidding processes, although they will be permitted to continue work on ongoing contracts.