Government warns Pappu Construction of contract termination on key projects

Tuesday, October 30th, 2018 | | Money

At least two government agencies have warned of terminating one irrigation and two bridge contracts handled by the joint venture companies involving Pappu Construction after progress on both projects remains unsatisfactory.

In the last two weeks, Sikta Irrigation Project and Mid Hill Highway Project (Eastern) offices issued separate public notices to the joint venture companies why their contracts should not be terminated.

Sikta Irrigation Project Office had awarded the contract to Coastal-Pappu JV 28 months ago to construct main and link canals and rehabilitation of headworks of Dunduwa Irrigation System, one of the main branches of the project.

The contractor’s deadline to complete the project ended in the first week of October, according to Sikta Project.

The Mid Hill Highway Project (Eastern) had awarded the contract to construct two bridges over Khangsang and Sokhukhola rivers in Sindhuli district to Pappu/Nepal Pragati JV on July 13, 2011. The contractor’s deadline that was extended also ended in January 2014.

Just seven percent work is done on Sikta Project while 43 percent work has been done on the two bridge projects.

The Dunduwa Irrigation System project would irrigate 16,000 hectare lands in western Banke district.

This area is more than one-third of the total 44,000 hectares land that Sikta Project would irrigate.

Sikta Irrigation Project Office on October 15, issued a public notice to Coastal-Pappu JV seeking reasons for the delay.

The notice reprimands the contractor for “not completing the work as per the contract, sheer negligence, wilfully and deliberately not working at the site”.

The notice further says, “The office has no other alternative, but to terminate the contract as Pappu Construction’s actions demonstrated its intention to not carry out its obligations under the contract”.

Sikta Irrigation Project Director Krishna Nepal said, “We issued the notice as a part of a strategy to punish the contractor who does not work and support one that performs well.”

Nepal, who joined as chief of the project last month, said, the company has submitted a clarification letter on Sunday. Further decision would be taken after evaluating the letter. Coastal-Pappu is constructing the 23km-long canal. It has only begun work in 7km section of the project so far.

Owner of Pappu Construction Hari Narayan Rauniyar last month told the Post his company had completed 1.5km of the project and had done clay work on the remaining 7kms.

Rauniyar had said the company could not work further because of a dispute on compensation of the land acquired and a delay in felling trees by the government authorities.

Rauniyar is a businessperson with shades of grey. Sanghhiya Samajwadi Forum suspended him as lawmaker after the Commission for Investigation of Abuse of Authority charged him of corruption.

The delay in completing this project will not affect irrigation service in Banke because Dunduwa’s old irrigation system still serves the local population. Project officials said it is being upgraded to ensure adequate water is available in targeted areas.

Due to the tardy progress, the Saudi Fund for Development, which pledged Rs2.4 billion for constructing and renovating sub-ordinate canals of the project, had threatened to withdraw its support in March this year, according to Ministry of Energy, Water Resources and Irrigation officials.

A joint secretary at the ministry told the Post, “The Saudi Fund for Development had warned us of stopping additional funding to the project until the contract is terminated.” According to Sikta Project, the contract awarded to Coastal-Pappu JV is worth Rs980 million. Saudi Fund was to bear half this cost.

Regarding the bridge over Khangsang and Sokhukhola rivers, Pappu/Nepal Pragati JV has neither worked in the project nor applied for an extension of the deadline after it expired in January 2014. The original deadline was January 12, 2013.

Mid-Hill Highway (Eastern) Project Manager Satyandra Shakya said, “Our focus remains on continuing the project with the contractor because of cost escalation associated with a new contract. We may have to terminate the contract and blacklist the contractor if they continue to defy our request.”

Following the public notice, the contractor has explained the reasons for the delays, Shakya said. “We will take an appropriate decision after studying it,” he said.