Delay in payments by govt sparks FCAN protests since July 30

Published On: August 12, 2023 07:40 PM NPT By: Samiksha Shrestha

Construction entrepreneurs to start third phase of protest from Sunday

KATHMANDU, Aug 12: Wearing safety helmets, construction vest and chanting slogans with raised hands, construction entrepreneurs from across Nepal at the behest of the Federation of Contractors' Associations of Nepal (FCAN) have been staging protest against the Government of Nepal for its  failure to promptly compensate contractors and construction workers. The protests are being held since July 30. On Saturday, the contractors held a rally from Babar Mahal to Maitighar Mandala.

The construction entrepreneurs have claimed that a large sum of money has not been paid by the government to them. The delay has caused  numerous challenges and setbacks within the construction industry. The FCAN is advocating for extensions of contract period and price adjustments in line with the prevailing inflation rate, and for ensuring fair compensation for their work in the changing economic conditions. Rabi Singh, the president of FCAN, disclosed that the government agencies collectively owe contractors an estimated Rs 50 billion, leading to delay in projects and contractual non-compliance.

FCAN has expressed serious concern that the budget for the fiscal year 2023/24 has not addressed the most necessary and important demand of the Federation to extend the deadline until the end of June 2024 as promised by the government. It also does not mention about making the due payments on time even to contractors who have completed their projects, canceling the milestone system and addressing the current exorbitant price hike.

The construction workers have been demanding the fulfillment of its vital 10-point demand aimed at bolstering the nation's construction industry. Foremost among these is the call for immediate payments for completed projects. With these payments pending, contractors have been unable to fulfill their contractual obligations. “Many contractors issued checks to workers and suppliers expecting payments from the government, but due to lack of government payment, the contractors were jailed when the check bounced,” said Nirmal Aryal, deputy director and press coordinator of FCAN.

FCAN has further decided to strengthen the ongoing protest. The agitating contractors announced the third phase of the protest during a meeting of the federation on Friday. They have decided to padlock the Department of Roads and the Department of Water Resources and Irrigation from 9AM to 3PM on Sunday till Tuesday and hold a sit-in. “Although the first and second phase of protests have been completed, we have not got a concrete response from the government, so we are planning to organise the third phase of protest,” Aryal added.

Press Coordinator Aryal said that the mobilization of construction workers has been affected because the government has not released funds on time. 

This is because of the impact of the Covid-19 pandemic on the construction sector worldwide coupled with inflation, and the elections held in November 2022.

Despite the construction entrepreneurs' warnings of halting projects and escalating protests if their demands are not addressed, the government has not extended project deadlines nor fulfilled their demands. FCAN has warned that the financial burden on the Nepal government will increase and the projects will be stalled.

Earlier, the finance minister had made it clear during the budget announcement for the fiscal year 2023/24 that the government will release the budget for construction projects only after completing all the necessary procedures. The budget also mentions that the project managers will be held responsible and accountable for the delay in projects, and the records of construction entrepreneurs will be updated through the Public Procurement and Monitoring Office.

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