Kathmandu. The contract for the construction of the 22.66-km Inaruwa-Kaptangunj road section along the Postal Highway has been terminated.

The Project Office Itahari under the Postal Highway Directorate under the Department of Roads on Tuesday terminated the contract agreement with Gauriparbati-Dev and Sier-Land Joint Venture (JV), Biratnagar.

The contract for the upgrading of the road was signed with the JV on January 15, 2021 at a cost of Rs 527 million. Only 18 per cent progress has been made so far after the contract was signed for the construction of the road by mid-July 2081. Although the contract agreement was extended till Asadh 2083, the contract was terminated due to failure to complete the work despite repeated reminders, failure to work as per the commitment and the site was stalled.

The contractors who cancel the contract will be liable to forfeit Rs 169.4 million as performance guarantee and Rs 23.1 million in advance. The advance amount will be charged with 10 percent interest. The contractor had bid 50 percent less than the estimated cost of the project.

The Project Office, Itahari, had sought a 15-day explanation from the contractor asking why the contract was not annulled. As the clarification submitted by the contractor was not satisfactory, the contract was scrapped as per the provisions of the Public Procurement Act.

The reasons for not completing the work within the stipulated time, the updated schedule for completing the work, reliable plan of resource mobilization and the official representative of the contractor were not present with the commitment to complete the work, the clarification submitted was not satisfactory and the Public Procurement Act and the contract agreement were violated.

It has been recommended that the amount as performance guarantee would be confiscated as per the provision of the Act, the amount required to complete the remaining work would be recovered as government dues and it would be kept in the blacklist.

They have been requested to be present at the office within 15 days for financial verification after evaluating the updated work so far and the remaining works. If the contractor does not attend the office, the office will be evaluated.