First Business News Portal in English from Nepal
KATHMANDU: The contractors stated that they would be forced to take to the streets because the government has not settled their payments or increased the price of construction materials to reflect the sharp increase in inflation.
They have given a deadline of June 19 for the resolution of their complaints.
According to Rabi Singh, president of the Federation of Contractors’ Association of Nepal, all problems in the construction industry must be handled by the government.
“The government’s policies are to blame for the issue with the construction. ”.
Slowed trade and a slowdown in the mining and construction industries were the main causes of the economy’s poor performance in the second quarter (mid-October 2022 to mid-January 2023) of the year.
The second quarter’s seasonally adjusted growth rate for the GDP, as calculated by the National Statistics Office, may fall by 0.73 percent.
The previous quarter (mid-July 2022 to mid-October 2022) saw a drop of almost 0 point 34 percent.
According to Singh, the government put out bids for the projects without knowing where the funding would come from.
Numerous initiatives were launched simultaneously, including the building of 300 hospitals, 180 strategic roads, cold storage, local government structures, and irrigation projects.
However, there were no funds available to support them as the government’s revenue stream dried up following the imposition of the imports ban, which was in place for almost eight months.
For instance, Singh claims that a strategic road project would cost Rs 50 million but that the government only allotted Rs 3 million.
The majority of the initiatives aimed to increase voter turnout during the general elections that took place in November of last year.
“We have urged the administration to give critical infrastructure top priority. We have also asked the government to remove pointless projects from the lists, according to Singh.
There is a $400 billion deficit in the current fiscal year, according to the government.
According to Devendra Karki, a former government secretary who oversaw the ministries of energy and physical infrastructure, asking for a deadline extension for 3,000 projects is illogical. This is a ridiculous idea. ”.
“The contract documents contain clear provisions regarding deadline extension and cost adjustments,” he continued. The government and contractors must follow the law. ”.
Karki said that because every tender has its own terms and conditions, each project needs to be evaluated on an individual basis.
“While asking for deadline extensions for projects impacted by the Covid-19 pandemic is unusual, repeatedly asking for them is not reasonable. ”.
By amending the Public Procurement Regulation in July, the government extended the project’s deadline by a year in August of last year, citing the impact of Covid.
The contractors expressed confidence that the government would grant them an additional extension.
Prime Minister Pushpa Kamal Dahal promised to address the problems a day before his visit to India, according to Singh.
In March 2022, Nepal removed all limitations caused by COVID-19.
Then, from mid-June to mid-October, there was a legal prohibition on the extraction of riverbed materials used in construction.
In October, the national holidays of Dashain and Tihar had an even greater impact on the projects. Then, the November elections further hampered the projects’ progress.
The government mandated the closure of the crushing plants in January of this year.
The government was unable to pay the contractors as the economy once more began to slow down.
The interest rates on loans skyrocketed as a result of the strict monetary policy that was followed. Fuel costs doubled.
“The cost of diesel was around Rs 100 per litre when we signed the project contract. The price of a litre increased past Rs 180,” claimed Singh.
According to Singh, the government has given us about Rs 25 billion in the last two months. “It still owes us roughly Rs 70 billion in payments. ”.
Speaking on behalf of the Department of Roads, Ramhari Pokharel told The Washington Post that there are problems with payments for some projects as a result of a small budgetary allotment and a lack of money transfers.
After the federal level of bidding was finished, some projects that were transferred to provinces were left in limbo, according to Pokharel.
“However, the contractors are highlighting such projects in order to push back the completion date of every project in favor of underperforming ones. ”.
Since they must pay the fine for failing to complete the projects within the allotted time frame, Pokharel claimed that the contractors are concerned.
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