Development projects run late due to slow govt, contractors

KATHMANDU, APR 16 -

Development projects in Nepal are seldom completed on time due to delayed awarding of contracts by the government and slow implementation by contractors. According to the latest annual report of the Office of the Auditor General (OAG), development projects fell behind schedule because the government was slow in giving the contracts.

An audit of the transactions of 11 ministries in the last fiscal year showed that contracts for projects valued at 65.70 percent of the total outlay were awarded only in the second and third trimesters, even though it should have been done in the first trimester according to clause 20 (9) of Working Procedure Regulation 2008.

The 50th annual report has also stated that contracts worth Rs 25.17 billion out of the total contract amount of 38.31 billion were awarded in the second and third trimesters. Contracts awarded in the last trimester amounted to Rs 13.41 billion.

Likewise, 87 percent of the projects were given a deadline extension as they could not be completed on time. Clause 56 of the Public Procurement Act 2007 has provisioned that the contract period can be extended only during cases of a situation beyond control and when government agencies fail to provide the necessary facilities on time.

Out of the 1,748 contracts awarded under 10 government agencies, the deadlines for 1,518 projects were extended in the last fiscal year. The time extensions ranged from 50 percent of the original period for 572 projects to 50-100 percent for 581 projects. The time limit was doubled for 365 projects. “This shows a weakness in contract management and upgrading managerial capacity is essential,” the report states.  

The report has also revealed limited competition during the tender process. It said that the value of the contracts awarded were just 6.36 percent higher than the estimated cost.

Meanwhile, only 40.58 percent of the potential bidders who purchased tender documents filled and returned them. This shows there is not much competition, according to the report.

However, the contracts that were awarded under six ministries where there was electronic bidding were 32.05 percent cheaper than the estimated cost. “For this reason, the government should accord priority to electronic bidding,” the report said.

Source: The Kathmandu Post