25 Non-Performing Road Contracts Terminated; Government Moves to Revive Long-Delayed Projects

The government has begun taking strict action against construction companies that took road contracts but left projects incomplete for years. The Road Division Office, Kathmandu, on Monday issued a public notice announcing the termination of 25 non-performing (rugn) contracts. These projects date back to FY 2067/68 to 2079/80, during which contractors failed to make expected progress.

The termination process accelerated after Energy, Water Resources and Irrigation; Physical Infrastructure and Transport; and Urban Development Minister Kulman Ghising instructed subordinate agencies to end the practice of holding contracts without performing work. The ministry said that such non-performing contracts had pushed several public projects into indefinite limbo.

On Kartik 11, the Division Office had sought written clarification from the 25 contractors, asking why their contracts should not be terminated. According to Division Chief Subodh Devkota, the explanations submitted by the companies were unsatisfactory, prompting the office to annul the contracts in accordance with the Public Procurement Act. Records from the division show that despite repeated deadline extensions, contractors neither mobilized resources nor appeared at the project sites.

With the termination, the Division Office will now initiate legal and administrative action, including placing the firms on a blacklist, confiscating performance guarantees, deposits, and advance payment guarantees, and recovering the advance amount along with 10 percent interest. The government will also move to recover the cost required to complete the remaining work as government dues. The contractors have been directed to appear at the office within 15 days.

The office stated that despite multiple written and verbal reminders, the construction companies showed no interest in completing the works. In several projects, contractors failed to extend contract periods, did not undertake variation procedures, and remained absent from construction sites for extended periods—acts considered clear violations of contract terms.

Authorities say that terminating long-pending contracts is necessary to revive stalled road infrastructure projects. The Road Department has indicated that similar actions will continue in the coming days, with expectations that new contracting processes will finally bring these long-delayed projects back on track.