Kathmandu. The contract for the construction of the 6-km Ratuwa-Kesaliya road section of the Postal Highway has been terminated.

Itahari – The project office under the Postal Highway Directorate under the Department of Roads has terminated the contract agreement with Shrestha Construction Company Pvt Ltd Hetauda for the construction of the road.

A contract agreement was signed with the company on Kartik 23, 2019 at the cost of Rs 839.9 million (including taxes) for the completion of the road upgradation within three years. As per the contract agreement, the road construction is expected to be completed by November 7, 2022 but only 25 percent progress has been made. The contract was signed to upgrade the road to 4 lanes in some places and 6 lanes in some places.

The contract was extended twice. The contract, which was last extended, expired in May. Yubaraj Pokharel, chief of the project office, Itahari, said that the contract was terminated as the project was not completed despite repeated reminders, the construction works were not carried out as per the commitment and the site was shut down.

Project chief Pokharel said that letters have already been sent to the bank for the confiscation of Rs 41.9 million as performance guarantee and Rs 96.7 million as advance. The advance amount will be charged with 10 percent interest.

The Project Office, Itahari, had sought a 15-day explanation from the contractor asking why the contract was not scrapped. 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 is not present at the office, the office will be evaluated.