Contractors fear regressive changes in Public Procurement Act

Published On: June 15, 2019 03:00 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, June 15: Contractors fear that the provisions 'regressive' for the construction industry will stay in the seventh amendment of Public Procurement Act, similar to those in the recent sixth amendment, which had riled the contractors.

They say they have felt insecure after a few provisions--contracts could be extended only up to 50 percent of the time of contract period; restriction on the construction companies in which any member is charged of graft case; and restricting them from participating in any contract after they are referred for blacklisting--among others were included in the amendment. These provisions in the sixth amendment had invited protests from the contractors.

Bowing to their demands, the government had forwarded a new amendment in less than a month. However, the contractors remain apprehensive.

Organizing a press meet in Kathmandu on Friday, Nepal Construction Entrepreneurs' Association, a professional body of contractors, stated that they fear the government may bring 'more regressive policies'.

President of the association Yakshya Dhoj Karki demanded the government consulted with them and other stakeholders while making amendments in the law.

Due to sluggish work progress in development projects, the government has taken tougher stance on the construction companies, who are generally blamed for under performance and project delays.

The government had also put some provisions in the annual budget and programs last month to make the construction companies more accountable. But the companies have said that the provision of raising defect liability period to five years, up from one year, has come as an added burden for them.

“There is nothing to make civil servants who monitor the project accountable," Karki said. "The additional defect liability period is a completely damaging step."

The association has also claimed that other provisions such as not paying VAT credit on consumption of diesel in development projects and manufacturing industry as well as mandatory Personal Account Number (PAN) for informal workers and mandatory social security for all workers has added further financial burden for them.

“Mandatory PAN for laborers and workers in the construction industry has alone added additional 4 percent on the cost of project. Therefore, the government should add the cost in the project contract,” Karki further said.

Leave A Comment