Under fire over expressway consultancy process, Army changes letter's subject

Published On: April 4, 2020 08:14 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, April 4: In what appears to be an admission of a mistake in the process of picking a South Korean joint venture firm as consultant for the Kathmandu-Tarai Fast Track (Expressway) project, the Nepal Army has corrected its previous letter to the firm as 'Letter of Information'. The letter sent earlier to the firm was a "Letter of Intent'.

The correction comes after concerns were raised over the Nepal Army's intentions after it rushed to award the Korean joint venture firm the multi-million-dollar contract by flouting procurement-related laws and regulations. However, the Nepal Army has only corrected the letter to the consultant to move ahead with its decision by ignoring the criticism.

Earlier on Tuesday, the Nepal Army, which has been entrusted to develop the national pride project, hastily picked the South Korean firm (Yooshin Engineering Corporation Korea joint venture with Korea Expressway Cooperation and Pyunghwa Engineering Consultants Ltd) for design and construction supervision of the expressway at a cost of $11.51 million (without value-added tax), or nearly Rs 1.2 billion.

The decision to hastily open the bidding and award the contract to the Korean joint venture at a time when the country is under a COVID-19 lockdown has raised suspicion over the intention of the Army. After questions were raised over the decision to issue the Letter of Intent to the Korean company after concluding negotiation on the same day it was picked, the army has moved to correct the letter to say it was just a 'Letter of Information'. Experts on public procurement say that it takes at least a week to complete the negotiation after opening the bidding for any contract.

Two other firms have filed a complaint at the Public Procurement Monitoring Office (PPMO) saying the army flouted the public procurement law. They have claimed in their complaint that they were made ineligible even after submitting their proposal based on the request for proposal.

In response to their complaints, the PPMO even wrote to the Nepal Army asking it to follow the 'applicable law and regulations' while carrying out the financial opening. The Nepal Army decided to move ahead with the contract awarding process by ignoring the letter of the PPMO as well as the government's recent announcement to extend the deadline of public tender by one month due to the lockdown.

The Nepal Army has also selected the bidder by ignoring the price factor of the consultancy service. While the consortium of Singapore-based Meinhardt had quoted $8.25 million for the work, the Nepal Army went on to select the Korean company that had quoted $3.26 (approximately Rs 83.4 million) more.

An official at the PPMO told Republica that they have sought all documents from the Nepal Army to investigate the issue. “We will investigate the issue and give our opinion whether any public office has followed the procurement rules and procedures. Even if there are lapses, we cannot terminate the contract,” said the official.

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