12 Irrigation Contracts Terminated; 40 Road Projects Face Cancellation Over Inaction

KATHMANDU, Oct 26 — The Ministry of Energy, Water Resources, and Irrigation has terminated 12 dormant irrigation contracts and initiated procedures to cancel 40 non-performing road construction contracts across the country. The move follows Minister Kulman Ghising’s directive to take strict action against contractors who were awarded projects but failed to execute them.

12 Irrigation Contracts Cancelled

According to the Janakpur-based Irrigation and Water Resources Management Project, the terminated contracts were part of the former People’s Embankment Program Field Office No. 2 in Jaleshwar, Mahottari.

Officials confirmed that termination notices had been issued as early as May and July 2024, but the concerned contractors failed to resume work. Despite multiple reminders and public announcements, there was no progress, prompting authorities to cancel the contracts and seize their performance bonds as per contract terms.

Additionally, a 15-day public notice was published on October 16 to terminate six more stalled contracts under the Babai Irrigation Project.

The ministry has instructed officials to assess completed works and evaluate the remaining tasks within 15 days under public procurement law for further administrative and legal action. The cancelled contracts were originally signed during fiscal years 2011/12, 2012/13, 2016/17, and 2017/18, indicating long-standing neglect.

40 Road Contracts Under Termination Process

The Department of Roads has also begun the process to terminate 40 stalled road construction projects that have remained incomplete for years.

According to a public notice issued on Sunday, the breakdown of pending contracts is as follows:

• Tumlingtar Road Division Office – 17 contracts
• Ilam Road Division Office – 12 contracts
• Hetauda Road Division Office – 7 contracts
• Nepalgunj Road Division Office – 4 contracts

These offices have asked contractors to justify why their inactive contracts should not be terminated. Previously, similar actions had been initiated to cancel 68 other dormant road contracts nationwide.

Ministry’s Strict Action on Non-Performing Contractors

Minister Kulman Ghising has reiterated that contractors who fail to deliver within deadlines will face strict legal and financial action, including contract termination, blacklisting, and bond seizure.

The notice emphasizes that many contractors had been absent from project sites for extended periods, even after multiple deadline extensions, written notices, and verbal warnings.

Contractors have been given 15 days to present an updated work plan, a credible resource mobilization strategy, and valid justifications if they wish to avoid contract cancellation.

If they fail to comply, authorities will proceed with termination under Public Procurement Law, leading to blacklisting, confiscation of performance bonds and advance guarantees, 10 percent recovery on advance payments, and collection of remaining project costs as government dues.

The ministry’s decisive move marks a significant step toward accountability and transparency in Nepal’s public construction sector, aiming to ensure that long-delayed infrastructure projects finally see completion.