Chinese contractor, local suppliers reach four-point agreement
KATHMANDU, March 22: Work on Bhairahawa-based Gautam Buddha International Airport is resuming from next week.
Chinese firm Northwest Civil Aviation Airport Construction Group -- the contractor of the project - and its local contractor and suppliers signed a four-point agreement on Tuesday, paving way for resumption of construction work.
“Dispute between local suppliers and the Chinese firm has been resolved. The work will resume from coming Tuesday after the Chinese firm assesses works completed by local contractors and pays them accordingly,” Om Sharma, the project manager of Gautam Buddha International Airport Project, told Republica.
The assessment of works completed by local suppliers, including North West Infra Nepal, has begun from Tuesday itself. About half a dozen suppliers have been working for the project.
Local suppliers had been halting work since Thursday, demanding that the contractor settles their payment first.
The agreement states that assessment of works will be completed within five days and that the contractor has to release payment within two days of the completion of assessment, Sharma said, quoting the agreement signed by the contractor and local suppliers.
The two sides agreed to sign the agreement only after the government stepped in. The Ministry of Culture, Tourism and Civil Aviation had sent a team led by Joint Secretary Dundu Raj Ghimire to the project site for mediation. The ministry had also invited the Chinese firm’s vice chairman to attend the meeting.
Government officials say that the project ran into problem because of the group’s decision to get the works done by local suppliers and contractors. After misunderstanding between the contractor and its local suppliers came on surface, the government had piled pressure on the contractor to sever ties with local suppliers.
It is illegal to hire such unauthorized parties to do project works, according to the contract document.
“Though a four-point agreement has been reached, it is not clear whether the Chinese firm will manage the project on its own or hire other local suppliers,” added Sharma. He also said that the Chinese firm has also been facing cash problem as cost of preliminary work is low. “We, however, are ready to extend help to the contractor to move the project ahead smoothly.”
Only around 25 percent of the project work has been completed so far. The project is scheduled to be completed by June next year.
Hiring local partners for contracts by foreign companies has become one of the major problems in contract management in Nepal. In its recent portfolio review meeting, Asian Development Bank, which is co-financing the project, had said that ghost contractor has become a major issue in contract management in the country.
Northwest Civil Aviation Airport Construction Group had bagged the contract worth Rs 5.5 billion in November, 2014.