KATHMANDU, Feb 24: Around 30 percent of government-planned infrastructure projects have been stalled over the past decade, primarily due to a lack of effective laws and policies, according to the Federation of Contractors' Associations of Nepal (FCAN).
FCAN stated that the government initiated 100,000 projects worth approximately Rs 1.9 trillion in the last ten years. "However, 30,000 of them have been left stranded," said FCAN President Rabi Singh, speaking at a program in the capital on Monday.
Construction entrepreneurs attribute the failure to complete planned projects to a lack of coordinated laws. "Mainly, there are conflicting clauses in the Public Procurement Act and 41 other laws related to the construction sector, which has hindered the execution of infrastructure development projects," Singh said.
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Key problems plaguing the sector include delays in awarding contracts, land acquisition issues, a defective Forest Act, difficulties in obtaining permits from local bodies, delayed payments by the government, awarding contracts without securing financial resources, and corruption through consumer committees at the local level.
The Commission for the Investigation of Abuse of Authority (CIAA), in its 33rd annual report two years ago, also pointed out irregularities committed by consumer committees and ‘tole sudhar samitis’ (neighborhood improvement committees). The anti-graft body suggested that government authorities make these committees more accountable when mobilizing funds for local-level development projects.
FCAN President Singh added that the bureaucratic practice of awarding contracts without disbursing the necessary budget and delays in fund transfers have also impacted the construction sector's supply chain. "This has led not only to the confiscation of bank guarantees maintained by contractors but also causes banks to suffer due to non-recovery of their loans."
The government, led by then-Prime Minister Sushila Karki, cancelled contracts for projects worth Rs 2 billion in the past few months. According to government records, around 250 projects have become sick due to contractors, with many remaining incomplete for the past 15 years.
Attributing the rising number of sick projects to the Public Procurement Act, contractors have sought government intervention to revise existing laws. They have urged the government to declare an emergency in the construction sector and implement an umbrella act that consolidates various fragmented laws.
