Kulman Ghising, who became the Minister of Physical Infrastructure, Energy, Water Resources and Irrigation and Urban Development in the government after the Gen-G movement, terminated 66 sick contracts. No new contracts have been signed in the contracts that were terminated in this way. In the context of some contracts, construction entrepreneurs have gone to court, while some have not been able to sign new contracts due to lack of source consent.

The Balendra Shah-led government is preparing to form a study team within 30 days to prevent and resolve the contract sickness. The 100 agenda for governance reform approved by the Council of Ministers on 13 Chaitra 2082 states that the budget management, land acquisition, environmental impact assessment approval, contract termination and other processes will be simplified by reviewing long-standing, sick projects and projects that have not been completed on time.

‘A study team will be formed within 30 days to resolve the problems of sick projects, broken projects and unproductive investments,’ the list says. ‘The said team will evaluate the relevance and feasibility of the project and make recommendations on whether or not to continue it.’ Ramhari Pokharel, Joint Secretary and Spokesperson of the Ministry of Physical Infrastructure and Transport, said that preparations are being made to move forward by making an ‘action plan’ regarding the list of problems to be solved under the ministry.

‘A study team will be formed within the specified time to resolve the problems of sick projects, broken projects and unproductive investments,’ Pokharel said. ‘We are discussing how to proceed for this, we will finalize it soon.’

The highest number of 41 contracts have been broken under the Roads Department. In fact, 227 contracts are sick under the Roads Department. Out of the total 18.33 billion 42 million sick contracts, 3.86 billion have been terminated. The Road Department has stated that if there is no progress in the work among the sick contracts, the contract will be terminated.

Most of the sick contracts are under the Road Division Office Kathmandu and Postal Highways. The contract for the Kankai Bridge in Jhapa has been terminated after there has been no progress in the work for 14 years under the Postal Highways Directorate. But no work has been done on this contract so far. After the termination, the further process for a new contract has not been able to proceed. Locals are suspicious that the work will not be done again if the bridge work has not started even though the monsoon is about to arrive.

The process of obtaining source assurance from the Ministry of Finance to re-contract the broken contract has been initiated, said Shyam Bahadur Khadka, Deputy Director General and Spokesperson of the Road Department. ‘As per the Procurement Act, the amount required to complete the remaining work after the contract is terminated will take time to be finalized,’ he said. ‘Until this is finalized, the source agreement has not been obtained from the Ministry of Finance.’

Khadka said that the contract process will be moved forward after the source agreement is received. A Road Department source said that there has been an additional problem as the Ministry of Finance has taken the stand to grant source agreement only after completing the legal process. He said that some are in litigation, some have been sent to the Ministry of Finance after requesting source agreement, and some are in the process of being discussed on how to proceed. He said that the contracts that have reached a stage of becoming unhealthy will now be moved forward with the termination process.

There are 215 ongoing contracts under the Water Resources and Irrigation Department. Out of these, 33 contracts are problematic. Of which, 22 contracts have been terminated. The total contract amount of the terminated projects is Rs 14.23 billion. The contracts of 6 projects under the Babai Irrigation Project, 15 under the Irrigation and Water Resources Management Project Janakpurdham Dhanusha and the construction of the Sunkoshi-Marin Dam of national pride have been terminated.

The largest contract to be terminated is for the Sunkoshi Marine Diversion. After the contract was terminated, the construction entrepreneurs had approached the court. However, the Supreme Court had quashed the interim order issued in favor of the construction entrepreneurs on 27th Magh, paving the way for the forfeiture of the security deposit. This order will forfeit the Rs 3.6 billion bank guarantee kept by the contract-taking company Patel-Raman JV for performance security and advance payment. Although the project has been requesting the bank for this, the amount has not been credited to the account.

Patel-Raman JV had won the contract for Rs 14.75 billion in Magh 2079 to complete the dam construction work on the Sunkoshi River in 4 years and 7 months. The department has stated that there has been no progress in the contract for the supply and installation of civil structures, gates, hydro-mechanical equipment, and installation of the project's dam, power house, and other structures.

In the event of a breach in Sunkashi Marine, the cost estimate for the remaining work has been prepared and submitted to the department by the project, said Premhari Parajuli, Senior Divisional Engineer of the Water Resources and Irrigation Department. 'The further process of the contracts that were breached elsewhere has not been progressed,' he said, 'There were also old contracts for river control, some of which were breached when up to 80 percent of the work was completed, now we have asked to prepare and evaluate the cost estimate for the remaining work.'