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Plan to punish contractors dropped after pressure from higher-ups

When the government launched a crackdown on contractors with dismal performance about eight months ago, under-performing companies with a number of road projects were expected to fall in line. But strong political connections of a majority of non-performing contractors have become the bane of the Department of Roads, the government agency authorised to initiate action against the defaulters.

Although the Division Road Office, Kathmandu was preparing to write to the banks to confiscate the advance payment guarantee (APG) issued by the financial institutions on behalf of the concerned contractors last month, the department aborted the plan after “receiving instructions from the higher authorities”, sources at the road office said.

The government entities make payments to the contractors for the works against the guarantee issued by the banks on behalf of the contractors.

The road office had planned to seize the APGs of eight contractors related to 12 road projects in Kathmandu.

Himdung and Thokar Company owned by lawmaker Bahadur Singh Lama; Shailung Construction owned by Sharada Prasad Adhikari, who is also the landlord of ruling Nepal Communist Party (NCP) Co-chairman Pushpa Kamal Dahal; and Swachchhanda Nirman Sewa of Jaya Ram Lamichhane, who contested the Constituent Assembly elections in 2013 on the Nepali Congress ticket, are among the contractors facing seizure of the bond amount.

“We were about to start the process of seizing the APG and then we received instructions from higher authorities to put the plan on hold for the time being and let them continue the works,” said a source at the Road Division Office, Kathmandu. “Political pressure may have played a role, as those who were under scrutiny were some influential contractors.”

However, Rabindra Nath Shrestha, director general of the Department of Roads, denied any political interference. “We have taken action against a number of influential contractors. But we decided to let some contractors in question work without seizing the APG after they showed real commitment to expediting works,” said Shrestha, stopping short of explaining the “real commitment”. “We won’t seize APG as long as contractors are willing to start their work immediately despite a poor track record. Our job is to ensure that the project gets implemented.”

Officials, however, said road offices were seizing the APG of some under-performing or non-performing contractors across the country as per the directive of the department. “But influential ones have been spared.”

The road department had decided to seize the APG of Swachchhanda/Panchakanya JV for poor progress in the Budhanilkantha-Muhanpokhara Road Expansion project. The contract for this project was awarded on June 5, 2016. But the contractor had completed only 80 percent of works related to the retaining wall until November-end last year, according to the road office.

Similarly, Diwa/Shailung JV has completed works on just half-a-kilometre stretch of the 3.8km Sattale-Aakashedhara-Baluwakhani-Sundarwasti road project near Kapan. The project contract was awarded on June 5, 2016.

Shailung Construction was carrying out works related to laying curbs and pipe in 1.2km Akashedhara-Ram Mandir-Krishna Mandir stretch until November end.

Sapana/Himdung JV delayed work on the Kageshwori-Chakrapath-Fikuri-Gagalphedi Road project. Keureni Barahi, Gorkha Appropriate, White Gold and BSD Nirman Sewa were other contractors facing the seizure of the guarantee amount.

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