News

Payment delay ‘stalls 800 bridges’

June 28, 2018

Prithvi Man Shrestha, The Kathmandu Post, 28 June 2018

The government’s failure to make timely payments to contractors has stalled construction work of 800 bridges in the country, the Department of Roads (DoR) said.

Most bridges under construction are under-funded. This has put the government in a difficult position to make timely payments to contractors for the work completed by them, officials said.

The department has not made payments for bills submitted by contractors for portion of work completed, as well as fully completed bridges. This has led to suspension of work on most bridges.

DoR Bridge Division chief Arjun Jung Thapa said, “Work has stopped on most of the 800 bridges since last month. The pace of work has slowed on many bridges since this March.” The department is constructing 926 bridges. Out of these, work on 88 bridges is complete. However, payments to contractors are pending for most of the projects, the department said.

The department had sought more funds from the Finance Ministry for most of the bridge projects. However, the ministry told the department to send a formal request to them (Finance Ministry) to switch funds from the static projects and make payments.

Having informed this to the department, the Finance Ministry on Sunday disbursed Rs 5 billion of the Rs 7.75 billion sought by the department to pay contractors. The ministry raised this amount by switching funds budgeted for other projects of the department following its request.

The department had sought budget from the Finance Ministry since March to settle running bills for bridges’ works, but it failed to get it on time.

The Finance Ministry has a different position on this issue.  A senior ministry official said contracts for most of the bridges were awarded without approval of the Finance Ministry.

“The problem is with the DoR which awarded the contracts without guaranteeing resources for the bridges. The DoR’s failure to request the Finance Ministry to transfer the budget from non-performing projects to active ones, is also delaying the payment,” said the ministry official.

The DoR counters this view saying they awarded contracts for projects included in the government’s annual budget, but adequate budget was not allocated for them.

“We cannot resist pressure of lawmakers and locals not to call tenders for such projects citing lack of enough resources once they are included in the budget,” Thapa said.

In the current fiscal year, the government allocated Rs3.5 billion for the bridges. However, contracts have been awarded for bridges costing Rs63 billion, according to DoR.

Budgetary allocation for most of the bridges is so meagre that it would take years to complete them although most of them have been awarded contracts that have three-year deadlines, according to the DoR. The deadlines of most projects have expired or would soon expire.

The delay in completing under construction bridges could delay in handing over local bridges to the provincial and the local governments. The government has adopted a policy of handing over projects after completing them.

Source: http://kathmandupost.ekantipur.com/news/2018-06-28/payment-delay-stalls-800-bridges.html