Construction Industry Woes

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Construction Industry Woes

The government’s move to relax some harsh provisions quietly in the seventh amendment of the Public Procurement Regulations caught many by surprise. However, it is not difficult to understand that the government changed the provisions in response to the strong demand of private contractors who had protested against the implementation of the amended regulations saying that the new provisions have put them directly in the firing line in case any mistake happens during the construction of projects.

Welcoming the changes in the amended regulations, contractors have withdrawn the protests. However, despite the government’s attempt to make changes in the existing regulations, the problems in the public contract awarding process and construction of projects have remained the same.

The provisions related to awarding contracts in the Public Procurement Regulations are very problematic and impractical. In fact, there are major loopholes in the Public Procurement Act such as low bidding, problems in land acquisition, preparation of the detailed project report (DPR) and site clearance, among others. This is why the construction of state-funded projects gets delayed significantly which adds to the government’s inability to take action against the contractors for failing to complete the projects within the stipulated timeframe. There is a need to completely overhaul the construction business and establish a new system for the sector.

Problems persist in every steps, from the bidding process to evaluation of proposals, awarding of contracts to monitoring and supervision of project construction and payment to contractors. These are hindering the timely completion of projects. In fact, the construction industry is mired in problems and malpractices the world over. There are several complexities in the sector and it is prone to corruption and is directly or indirectly influenced by organised criminals. Also, there are problems related to political interference in construction projects, largely due to shady business practices. Nevertheless, there have been a few improvements in this respect over the last few years. For instance, e-bidding has brought an end to the domination of organised criminals during the submission of bidding documents of construction projects. However, contractors still face several threats posed by the presence of criminal elements while they engage in construction works. Similarly, the competency of contractors is another problematic area.

The difficulties that have been seen in the development of many projects across the country have clearly indicated the low capacity of Nepali contractors. Lack of corporate liability in the construction business is also another issue which is particularly seen in joint ventures (JV) between two construction firms that are instituted to construct particular projects. JV partners often point fingers at each other when problems arise and hamper the development of projects. Likewise, project developers distrust the role of the monitoring and regulatory body of the government.

Now the time has come to end the malpractice in the construction sector. It needs more than the amendments in the Public Procurement Regulations and the changes made later by the government because the issues are still not resolved. Holding rigorous talks among contractors, government officials and other stakeholders will be the way forward to solve these.

Madan Lamsal
madanlamsal@gmail.com

 

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