The government has intensified action to terminate non-performing and stalled development contracts. The Department of Roads alone has moved forward with the process of cancelling 229 problematic contracts through various divisions and project offices. Construction contractors involved in these projects have been publicly asked to provide reasons for failing to complete work on time.
Shyam Bahadur Khadka, Deputy Director General and spokesperson for the Department of Roads, said that 38 contracts—including 25 under the Kathmandu Road Division—have already been terminated. According to him, public notices titled “Why Should Non-Performing Contracts Not Be Terminated?” have been issued, giving concerned contractors 15 days to submit clarifications.
In some cases, contractors resumed work after receiving notices, and their contracts were not terminated. However, those who failed to respond or became unreachable have had their contracts cancelled. Khadka added that some contracts are still in the termination process, while work has resumed on others.
Khadka noted that contractors should have refused to take responsibility earlier if political interference had obstructed progress in the past. He said the government was compelled to take action because many projects were stalled under various pretexts.
Meanwhile, construction entrepreneurs are angered, accusing the government of cancelling contracts irresponsibly without proper management. Ravi Singh, President of the Federation of Contractors’ Associations of Nepal, said the government should identify the reasons behind delays and work toward solutions instead of abruptly ending contracts.
According to Singh, more than 80% of stalled projects are due to government officials, not contractors. He argued that project managers and office heads who fail to perform should face action, and those genuinely responsible for stagnating projects should not be granted immunity.
Singh also pointed out that political directives given in the past, which government officials complied with, played a major role in making projects dysfunctional. Furthermore, he said many problems escalated because government officials did not follow provisions outlined in the Public Procurement Act and Regulations.
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