FCAN hails Public Procurement Act amendment as milestone for infrastructure development

KATHMANDU: The Federation of Contractors’ Associations of Nepal (FCAN) has described the second amendment to the Public Procurement Act as a “milestone” for infrastructure development and thanked the government for the reform.

Issuing a statement on Tuesday, FCAN General Secretary Shivahari Ghimire said ending the “low bidding” practice and introducing an average-based method for awarding contracts was a highly positive step.

According to the federation, the new provision will play an important role in addressing long-standing problems in the infrastructure sector.

FCAN said the amendment, which came after continuous efforts by its current executive committee, would mark a new chapter in the construction sector.

The amended law includes provisions preventing the initiation of procurement processes without budget allocation or guaranteed resources. It also requires land acquisition, compensation distribution, construction site handover, and environmental approvals to be completed before inviting bids.

The federation welcomed provisions requiring cost estimates to be prepared according to government-approved standards and clearly defining the responsibilities of employers, contractors, suppliers, and consultants.

FCAN also praised arrangements to provide incentives, bonuses, and other benefits to government employees who complete quality projects on time, as well as recognition and appreciation certificates for construction companies.

The federation said limiting performance security to five percent, allowing merged companies to count the qualifications of both firms, reducing the time for bid submission, and making decisions of the Public Procurement Review Committee mandatory would help make the infrastructure sector more organized and professional.

FCAN thanked Prime Minister Balendra Shah, the Infrastructure Development Minister, and government officials involved in the amendment process for their efforts to make the Public Procurement Act more infrastructure-friendly.

The federation has also urged the government to include price adjustment provisions for procurement contracts of all durations in the upcoming amendment to the Public Procurement Regulations.