KATHMANDU: In a major move to end delays in public infrastructure projects, the government has begun terminating long-pending “sick contracts” that remained stalled for years despite formal agreements.
Under the initiative of Minister for Energy, Water Resources and Irrigation, Physical Infrastructure and Transport, and Urban Development Kulman Ghising, the Kathmandu Road Division Office on Monday issued a notice terminating 25 non-performing road contracts. These contracts date back to fiscal years 2010/11 to 2022/23, many of which had seen no progress for years.
Earlier, Minister Ghising had directed agencies under the ministry to take strict action against contractors who take projects but fail to deliver, leaving national infrastructure works stranded. Following the directive, offices under the Department of Roads began the process of identifying and scrapping such contracts.
On October 28, the Road Division Office had sought clarification from the 25 contractors, asking why their contracts should not be canceled. According to Office Chief Subodh Devkota, the explanations submitted were “unsatisfactory”, prompting termination in accordance with the Public Procurement Act.
As per legal provisions, the government will now initiate actions that include blacklisting contractors, confiscating performance guarantees, deposits, and advance payment securities, and recovering 10% interest on advance amounts. Additional expenses required to complete the remaining works will also be recovered as government dues.
The notice states that despite repeated extensions, the contractors failed to demonstrate interest in completing the projects, remained absent from work sites for long periods, and continued to violate fundamental contract conditions. In several cases, contract periods had already expired with no request for amendment or extension, leading to the decision to cancel.
Contractors have been instructed to appear at the division office within 15 days for further legal processes.
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