Construction companies 'influencing' senior govt officials to snatch contract of Rs 25 billion in Kathmandu-Terai fast track project
November 29, 2023 05:30 PM NPT
By: Dilip Paudel
KATHMANDU, Nov 29: There are ongoing moves to snatch a contract worth Rs 25 billion for the construction of the fast track connecting Kathmandu with Terai/Madhesh, which has been initiated by the Nepal Army. Taking advantage of the 'legal loopholes' in the tender called by the army, a number of construction companies are lobbying to win the contract by influencing high-ranking government officials.
Controversy has arisen during the tender evaluation process of packages 8-A and 9-B of the fast track called by the army. Nine companies submitted proposals in response to the tender. In the first round of evaluation Axis GC Hanuman Baniya (JV), VPRPL-Bajra Guru Construction Company (JV) and JCE-Gauri Parvati Nirman Sewa (JV) were selected on the technical basis.
Kalika Construction (JV), which participated in the competition, was excluded from the army's evaluation. The controversy has been created because Kalika was not evaluated when the army did not follow the legal process. According to the provisions of the Public Procurement Act, there is a legal provision to determine whether or not a case has been filed for the crime of corruption. At that time, a case against Bikram Pandey, the director of Kalika Construction, was pending at the Special Court on charges of corruption in the Sikta Irrigation Project. However, Kalika went to the Public Procurement Review Committee after the army kept Kalika out without consulting the Ministry of Defense as per the provisions of the law.
According to section 65 (a) of the Public Procurement Regulations 2064, if a corruption case is found against a construction company during the proposal assessment by the evaluation committee, the concerned authority is directed to take necessary action according to established procedures. An official from the Public Procurement Review Committee stated that the army made mistakes by not seeking feedback. "The army made a mistake by excluding Kalika from the technical evaluation without consulting the Ministry of Defense, as per the Public Procurement Act," said the official.
Despite the initial corruption allegations against Kalika during the army's evaluation, the company has now been acquitted. Initially, other construction companies influenced the army, leading to the army's failure to seek feedback from the Ministry of Defense. Now, having been acquitted, Kalika is attempting to participate in the competition.
Although Kalika was acquitted by the Special Court, the Commission for the Investigation on Abuse of Authority (CIAA) has appealed against the company at the Supreme Court. CIAA officials insist that Kalika should be excluded from the evaluation, citing the pending case at the Supreme Court.
According to a senior official, there were flaws in the bidding process from the beginning. "The army excluded a company without consulting the Ministry of Defence," said the official, "From this, it is confirmed that there was a conspiracy." If the army had sought the opinion of the Ministry of Defense at that time, there would not have been a legal error. Taking advantage of that, after getting acquitted, Kalika is now trying to take advantage. After the approval of the construction companies of the two parties, the Ministry of Defense has given abstract instructions to the army to follow the law. Kalika is now lobbying to get the contract in its favor, while other companies are lobbying to get Kalika to participate.
After the Public Procurement Review Committee decided to implement this provision in the law, the army wrote to the Ministry of Defence. The Ministry of Defense has instructed the army to proceed according to the decision of the Public Procurement Review Committee on whether or not Kalika Construction JV should be included as per the provision in sub-sections 2 and 3 of section 65 (a) of the regulation. Prakash Paudel, spokesperson for the Ministry of Defense, said that the opinion should be worked according to the existing law and the decision of the Public Procurement Review Committee. "The project has been instructed to proceed ahead according to the law," said Paudel, "There is nothing that the ministry needs to decide."
According to sources, Kalika has submitted a bid at a lower rate than other contractors. The army officer gave an oblique answer saying that the process will be forwarded according to the law. Nepali Army Spokesman Krishna Prasad Bhandari said that the tender is under evaluation. "The proposal is under evaluation," said Bhandari, "And a decision will be made according to the law."
The government has entrusted the construction of the fast track to the army in the belief that the army will complete the construction on time and ensure quality work.
There have been disputes at various times. After the construction was not completed on time, the army extended the deadline. The government has extended the deadline of fast track till mid-April, 2027.
While there was widespread criticism that the army itself was involved in the contract and it did not send a positive message, the report of the Financial Comptroller General Office pointed out that the speed of the army in the fast track work was weak. According to the decision of the Council of Ministers dated May 4, 2017, the fast track contract with a distance of 72.5 km was handed over to the Nepal Army on August 11, 2017.
After taking over the responsibility of the construction by the army, the Detailed Project Report (DPR) was approved by the government on August 18, 2019 and the army started working on the project. According to the approved detailed project report of the project, 72.5 kilometers of road, 87 bridges, tunnels, interchanges, toll plazas, rest areas, environmental, social and other costs including contingencies were estimated to cost Rs 213 billion. The army has said that work is underway in various 11 packages related to construction. According to the army, contracts have been awarded, and proposals for some contracts are currently in the process of evaluation.