KATHMANDU, Jan 5: The standoff between the contractors and the government regarding the settlement of dues for construction works is likely to take a toll on the country’s overall development projects.
While the construction entrepreneurs claim that they are yet to receive Rs 40 billion for completed projects, the Ministry of Finance (MoF) says the government has settled all the payments except Rs 8 billion, which lacks proper bills and documents. In addition, the government is also not clear about how to fund the ongoing projects this year.
Amid the uncertainty, the construction entrepreneurs, whose payments the government has delayed for a long time, have called for a national level gathering on January 11 targeting to launch decisive protests. They have warned to halt project constructions until the government settles their dues.
Contractor-government standoff
Rabi Singh, president of the Federation of Contractors’ Associations of Nepal (FCAN), said the government paid Rs 20 billion for the projects of last fiscal year only. “We have not received payment for the projects completed since 2019/20,” he added.
Singh blamed the situation on the frequent change in governments. “With every change in the government, the number of old projects were removed while new projects were introduced. In addition, the governments allocated very small amounts to the approved projects, resulting in accumulation of the unpaid amount every year,” said Singh.
While the construction entrepreneurs have been demanding that the government settle their dues, the government has been making promises one after another. Singh blamed the government for dilly dallying to clear their dues. “The documents were sent from the MoF to the Ministry of Physical Infrastructure and Transport (MoPIT) and returned back a number of times needlessly, just to delay the payments.”
Singh said they are facing difficulties to take forward construction of infrastructure projects this year as the government has not released their payments on time. “We will be unable to take forward new projects until the government confirms sources of the fund for the projects under construction,” said Singh adding that the government must provide the amount even by taking more public borrowings.
The government through the budget announcement for the current FY has allocated Rs 150.53 billion for construction works under the MoPIT. Although the sources have been assigned for multi-year projects, there are no clear sources to fund the remaining projects, according to the contractors.
The government has been facing a crunch of financial resources for the past few years, mainly due to the slow revenue collection and excessive recurrent expenditure.
