Blacklisting Not Enough

Published On: December 2, 2022 08:00 AM NPT By: Republica  | @RepublicaNepal

The government has taken action against some erring construction companies. Issuing a public notice on November 30, the Public Procurement Monitoring Office (PPMO), which keeps track of government contracts, blacklisted 12 contractors for delaying construction works and/or breaching the contracts.  According to the PPMO’s notice, these blacklisted construction companies have been barred from participating in any bidding process initiated by the government for varying time periods. The PPMO says that action was taken against these underperforming companies’ for either delaying the projects they were awarded, or carrying out low quality construction or breaching any other provision of the contracts they had signed with various government agencies. However, of the punished companies, the one that has got the ‘maximum’ punishment has been prohibited from taking up any government project for the next two and a half years, upon the recommendation of the Road Division Office, Butwal. There is no doubt that, because of the negligence of the contractors, infrastructure projects in the country either undergo low quality construction or are delayed for years. Substandard construction of any infrastructure means risking the lives of the people who use it on a daily basis while delaying a project directly increases the cost of its completion, ultimately leading to a waste of the state’s scarce resources. This is a serious offense which doesn’t seem to abate with the passage of time. Every year, the PPMO blacklists dozens of contractors. Yet the trend of delaying projects or openly flouting other provisions of the contract is repeated every year.

According to the Public Procurement Act, the contractors who fail to carry out their responsibilities mentioned in the contracts, or sign contracts by making wrong claims about their capacities or don’t sign the contracts after being awarded the same are blacklisted on the recommendation of the government agencies concerned. Government agencies recommend blacklisting after terminating the contract. A blacklisted company cannot participate in any new contract awarding process by the government for one to three years. However, apart from being kept in the blacklist, such companies rarely face any other action. While the big companies often knock on the court’s door to even avoid being blacklisted, even if they are ultimately blacklisted, that doesn’t seem to discourage them from doing any wrongdoing in the future. That’s why dozens of companies get blacklisted every year. So, it’s clear that blacklisting the erring contractors alone is not enough if we want the country’s infrastructure development sector to change for the better. Tools other than blacklisting must be developed and tried out.

One measure that the government can possibly take against the defaulting contractors, besides blacklisting them, is making them pay a cash fine if they delay any infrastructure development project deliberately. For example, such companies can be made to pay a cash fine equivalent to a certain percent of the total cost of the project, if they are responsible for a delay in the completion of that project. Similarly, other measures like scrapping the license of such companies can also be taken. However, it’s not that the government didn’t try to mete out extra punishment on the defaulting contractors. But unfortunately, such efforts by the government were neutralized by the court of law. For example, about a couple of months ago, the government tried to introduce a rule that would scrap the license of a contractor if it is blacklisted for three times. However, the government initiative could not materialize after the Supreme Court issued an interim order in favor of the defaulting contractors, prohibiting the government from enforcing the rule. This clearly shows that it’s not possible for the government alone to right the wrongs in the infrastructure development sector. All stakeholders, including the courts and other authorities, must do their bit to make infrastructure development in the country smooth and efficient.           



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