Govt cancels 12 irrigation contracts, begins process to terminate 40 more road projects over prolonged delays

KATHMANDU: The government has scrapped 12 long-stalled irrigation contracts and initiated the process to terminate 40 additional road construction contracts that have remained incomplete for years despite repeated extensions and public warnings.

The Irrigation and Water Resources Management Project, Janakpurdham, under the former People’s Embankment Program Field Office No. 2, Jaleshwar Mahottari, announced on Sunday that 12 non-performing irrigation contracts have been formally terminated. The contracts had been left incomplete for years, causing delays in critical irrigation infrastructure in Madhesh Province.

According to the office, termination notices had been published earlier on Jestha 16 (May 29, 2024) and Shrawan 1 (July 16, 2024), but the contractors failed to resume or complete work as per their agreements. The authority stated that despite repeated requests and public notices, no significant progress was made, leading to the confiscation of performance guarantees and initiation of legal action in accordance with Public Procurement Act provisions.

The scrapped irrigation contracts date back to FY 2068/69, 2069/70, 2073/74, and 2074/75 (2011–2018). The office has instructed project teams to measure completed works and assess the remaining value within 15 days to proceed with re-tendering.

Meanwhile, the Department of Roads has started the process to cancel 40 road and bridge construction contracts that have remained idle for years. On Sunday, division offices in Tumlingtar, Ilam, Hetauda, and Nepalgunj published public notices questioning why the contracts should not be terminated.

Tumlingtar Division: 17 contracts

Ilam Division: 12 contracts

Hetauda Division: 7 contracts

Nepalgunj Division: 4 contracts

This comes after several road offices had already initiated actions to terminate 68 non-performing contracts earlier this year.

Minister for Energy, Water Resources, Irrigation, Physical Infrastructure, and Urban Development Kulman Ghising has instructed all subordinate offices to immediately end the trend of taking contracts without completing work. He emphasized that projects left abandoned for years have undermined public trust, wasted resources, and delayed infrastructure delivery.

According to the public notices, many contractors had repeatedly sought deadline extensions but continued to ignore commitments even after multiple written and verbal reminders. The ministry has clarified that if contractors fail to appear within 15 days with credible explanations, revised work schedules, or resource deployment plans, their contracts will be terminated, blacklisted, and financial guarantees seized.

The government has also warned that expenses incurred for completing the remaining works will be recovered as government dues, with 10% interest on advance payments to be imposed as per law.

The strong enforcement drive marks a significant shift under Minister Ghising’s leadership, as the government seeks to restore accountability in Nepal’s contracting system, long plagued by delays, negligence, and misuse of public funds.