Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: In a move that has stirred controversy, the government has given the green light to extend the deadlines of projects that failed to meet stipulated completion times.
The 13th amendment to the Public Procurement Regulation, 2080, has been officially approved, providing legal grounds for extending project deadlines. Sources suggest that the amendment was made under the influence of construction entrepreneurs seeking relief.
This regulatory amendment is anticipated to impact over 1,000 projects across various sectors, including infrastructure-related endeavors like roads, irrigation, buildings, urban development, and electricity projects. While concrete data on the number of delayed projects is lacking, it is estimated that more than 1,000 projects are currently behind schedule.
The Council of Ministers, in a meeting on Monday, amended the Public Procurement Regulations, benefiting contractors who have faced delays in project completion.
This follows a previous amendment on July 4, 2022, allowing a one-year extension for pending contracts. Subsequently, on July 6, the government issued a notice in the Nepal Gazette, extending deadlines for projects on the verge of expiration.
Keshav Kumar Sharma, the secretary at the Ministry of Physical Infrastructure and Transport (MoPIT), affirmed that the recent amendment would result in the extension of deadlines for over 1,000 projects. Sharma claimed that even projects facing delays due to budgetary constraints would benefit from this regulatory change.
Critics argue that the government’s decision opens a legal avenue for extending project contracts, placing a significant financial burden on the state. While government officials assert that deadline extensions will be granted only for projects encountering specific challenges, such as design changes, insufficient budget, non-availability of construction sites, delayed payments, lack of construction materials, or natural disasters, skepticism remains.
Secretary Sharma clarified, “The deadline for projects will not be extended due to contractor fraud. The government has blacklisted 80 companies for negligence against the law.” However, despite government actions against negligent contractors, the cost of projects has surged by billions of rupees due to delays, leading to stalled plans.
Government officials emphasize that contractors seeking deadline extensions must justify the need for an extended construction period. While some argue that the regulatory amendment was made with good intentions, concerns persist that it could inadvertently benefit contractors who failed to meet stipulated timelines.
A senior official from the Ministry of Urban Development acknowledged, “The public procurement act and regulations have always been amended under the pressure and influence of the contractors.”
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