56pc of dev project contracts extended last fiscal year
KATHMANDU, APR 13 - Majority of development projects have not been able to complete in time, forcing government agencies to extend their contracts.
Fifty-six percent government contracts were extended in the last fiscal year, according to the latest annual report of the Office of Auditor General (OAG). Of the 2,937 contracts of 15 government agencies, contracts of 1,632 projects were extended.
Moreover, 581 out of the extended contracts were extended by more than double the period of their initial contract deadline. A total of 516 projects got their contracts extended by 51-100 percent of the original deadline, while and 535 projects got extension by up to 50 percent. “The trend of contract extension has increased project costs,” says the report.
The Public Procurement Act has provisioned a contract could be extended only under conditions beyond control and under reasonable grounds that make the contract extension essential.
However, Baburam Gautam, assistant auditor general at the OAG, said projects seek contract extension without any reasonable grounds.
“Contractors give reasons such as festivals and monsoon for the delay in work, although they don’t state in their plan submitted to the government agencies that they would not work during that period,” he said, adding many contractors don’t complete the projects timely because a single contractor takes several contracts at a time.
The report says incidents like failure to complete work timely, extending contract period several times, contractors not starting work under different pretexts, need for a change in bridge designs, and the tendency of getting variation order, have proved the country’s contract management has not been skillful.
The report has given a number of examples of how Nepal’s contract management has remained poor. The Division Road Office, Palpa, extended the contract for building a bridge over the Kali Gandki River three times. The Rs 112.3-million project was supposed to complete in three years, but was extended for six years until the end of the current fiscal year.
In the case of Melamchi Drinking Water Project, eight out of 13 contracts investigated, got extension from 71 to 259 percent of the original contract period. Their contracts were extended although they failed to give pre-information about the contract extension as per the agreement, didn’t apply for extension, variation order was not issued and revised timetable was not submitted, according to the report.
A Steel Truss Bridge over the Bheri River has not been completed even after the extension of the contract deadline by four years and 11 months. The project undertaken by the Division Road Office, Surkhet, had signed a contract with the contractor on July 13, 2006, to complete the project within two years.
Similarly, it took 11 years to start work on a bridge over the Sunkoshi River under the Harkapur-Okhaldhunga Road Project. Although the contract was signed on July 13, 2002, and the deadline for completion was fixed for July 16, 2006, the contract period was extended until mid-April 2014.
An inspection of the project on September 24, 2013 found only three sub-structures constructed. “A few days ago, the initial construction of the project collapsed,” Gautam said.
The report has also highlighted increased variation order that the government has been forced to pay for delayed work, instead of receiving compensation from contractors. In the case of Melamchi Project, it has failed to recover compensation and bank guarantee amount from a Chinese contractor assigned for digging the tunnel even two years after contract termination.
The report says despite the government’s decision to take action against government employees approving erroneous designs and firms and experts involved in the supervision of the designs, no action has been taken.
Source: The Kathmandu Post
