Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: The government is set to terminate 234 stalled or non-performing contracts related to road and bridge construction that have remained incomplete for years due to contractor inaction. The decision follows mounting concerns over inefficiency and misuse of public funds.
The contracts fall under the jurisdiction of the Federal Road Supervision and Monitoring Office, which oversees multiple Road Division Offices as well as major projects like the Postal Highway and the Mid-Hill Highway. The stalled contracts are distributed across key offices as follows: Damak (38), Kathmandu (75), Pokhara (39), Surkhet (49), Postal Highway (16), and Mid-Hill Highway (17).
A special investigation committee will be formed to probe the roles of current and former officials suspected of contributing to the failure of these projects. These employees are believed to have either neglected their duties or delayed crucial decisions, enabling contracts to deteriorate into a non-performing state.
Minister for Energy, Water Resources and Irrigation; Physical Infrastructure and Transport; and Urban Development, Kulman Ghising, held a high-level meeting on Saturday with secretaries, joint secretaries, the Director General of the Department of Roads, heads of the supervision offices, and project chiefs. In the meeting, he stressed that terminating these “sick contracts” is the only viable option to end the widespread malpractice of taking contracts without delivering results.
“There’s a dangerous trend of quoting the lowest bid, taking mobilization advances, and diverting the funds elsewhere without doing any actual work,” said Minister Ghising. “This has eroded public trust and deprived citizens of essential infrastructure, despite billions in annual expenditure by the state.”
The government defines a “sick contract” based on the following criteria:
Contracts worth over Rs 20 million with less than 50% progress, despite extension beyond 100% of the original project duration.
Contracts with over 200% time extension and less than 80% progress.
Contracts with over 400% time extension and progress still below 95%.
Minister Ghising has called for strict and impartial enforcement of contract termination, warning against any influence or interference.
“Take action freely and confidently, regardless of who is involved. This will be a crucial step toward strengthening good governance. I assure you of full protection in doing so,” he told the officials.
The Minister also vowed to take immediate action against any form of irregularities, delays, bribery, or harassment of service seekers in any ministry-related office. He instructed staff to report anyone misusing his name to exert undue influence or cause disruption.
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