Govt amends Public Procurement Regulation to extend contract for over 1,000 projects

Published On: February 29, 2024 09:00 AM NPT By: Dilip Paudel

KATHMANDU, Feb 29: The government is preparing to extend the contracts of projects that have failed to complete the work on time. The government has approved the 13th amendment to the Public Procurement Regulation, 2080, and has legally opened the way to extend the deadline for projects that contractors have not completed on time. The government reportedly amended the regulations under pressure from construction entrepreneurs.

It is said that the government has amended the regulations to help extend the contract period of more than 1,000 projects that have not been completed within the stipulated time.

 Contractors of projects related to infrastructure such as road, irrigation, buildings, urban development, and electricity projects will benefit from this. Although there is no definite data, it is estimated that the contractors of more than 1,000 projects have not completed the work within the stipulated time.

The Public Procurement Regulations were amended by a meeting of the Council of Ministers on Monday, benefiting the contractors who have not carried out their work on stipulated time. Prior to this, the government had also amended the Public Procurement Regulations on July 4, 2022, allowing for the extension of pending contracts by one year. Then on July 6, the government published a notice in the Nepal Gazette extending the deadline for projects  that were about to expire.

Keshav Kumar Sharma, secretary at the Ministry of Physical Infrastructure and Transport (MoPIT), said that after the amendment of the Public Procurement Regulations, the deadline for more than 1,000 projects will be extended. Sharma claimed that even projects for which the government could not provide the budget on time will also benefit from this.

The government has been criticized for opening a legal way to extend the contracts of the projects when some contractors have put projects worth billions on hold, adding a huge financial burden to the state.

The government officials have maintained that the deadline will be extended only for projects facing specific challenges such as design changes in the purchase agreement, insufficient budget, non-availability of construction site, non-payment on time, lack of construction materials, or natural disasters at the construction sites. For the past four to five years, the government has been extending the deadline of projects by amending the laws related to public procurement under various pretexts.

According to Secretary Sharma, only projects facing delays due to factors other than contractor fraud will be granted deadline extensions.

“The deadline of projects will not be extended due to contractor fraud,” he said, “The government has blacklisted 80 companies for negligence against the law.”

Despite the government claiming to have taken actions against such contractors, the cost of projects has increased by billions of rupees due to the delay in completion of projects. Some plans have been stalled due to the contractors not completing work on stipulated time. The government officials stated that contractors must justify the need for extension of construction period.

While some projects legitimately require extensions due to special problems, negligent contractors can also take advantage of this law. A senior official of the Ministry of Urban Development said that although the amendment of the regulation was made with good intentions, it also benefits the construction entrepreneurs who didn’t carry out work on stipulated time.

“The public procurement act and regulations have always been amended under the pressure and influence of the contractors,” said the official.

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