'Big contractors forming cartel to win contracts'

Published On: September 6, 2017 02:41 AM NPT By: Rudra Pangeni  | @rudrapang

KATHMANDU, Sept 5: Small contractors - of class 'C' and 'D' categories - have alleged office-bearers of Federation of Contractors Association of Nepal (FCAN) of being self-centered and forming a cartel to win contracts.

They made the allegation after the federation maintained silence on demand of contractors for extension of threshold of open competition to Rs 10 million from existing Rs 6 million and on their objection of combining small packages of roads and buildings into a larger package.

The fifth amendment to Public Procurement Rules has raised the threshold, allowing consumers group to implement projects having higher cost. Similarly, several small-scale projects are now tendered as a single larger project, leaving small contractors out of the bidding process.
“There is a kind of cartel in public contracts which only favors large-scale contractors,” a small contractor said during the three-day AGM of FCAN which concluded on Monday. 

FCAN General Secretary Ram Sharan Deuja accepted there is dissatisfaction among small contractors. “Their concerns are genuine because political parties favored their cadres by increasing contract threshold for consumers' group. Also, other small projects of road and buildings are now combined as a large package to serve the interest of multilateral donors,” added Deuja. 
Hetauda-Sindhuli-Chatara-Dharan and Galchi-Trishuli-Syaphrubeshi are some of the projects which have been combined to make a larger package. Similarly, works like expansion of Surkhet-Jumla road have now been compiled to make a multi-billion-rupee projects that only class 'A' contractors can bid. 

Deuja also said that the federation will lobby with the government to reverse its decision of increasing threshold and compiling several small projects into a larger package. “We will launch strong action against the government decision once the local level polls are held,” he added
Speaking at the inaugural session of AGM on Saturday, CPN-UML Leader Bijay Paudel blamed large-scale contractors of having monopoly in contract bidding. Paudel, who is also the chief of the party's Physical Infrastructure Department, claimed that the contractors first influence the policymakers so that they set bid criteria that only a handful of contractors can meet. 


Considering upcoming elections, the AGM of Federation of Contractors Association Nepal has extended term of the incumbent executive committee by six months.

Issuing a statement, the 19th AGM of the federation that concluded on Monday decided to extend the term by six months. The term of incumbent executive committee was expiring in November.
The professional body of contractors will elect new executive for a three-year term in May next, according to the statement.

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