Pappu scam pegs back construction of central bank’s Baluwatar office

  • Given the contractor’s poor track record, officials at the bank are skeptical

Feb 10, 2019-

When the construction of a new building of the Nepal Rastra Bank at Thapathali, Kathmandu began in the third week of September, the National Reconstruction Authority was preparing to award the contract of constructing another building of the central bank at Baluwatar, Kathmandu.

The authority has taken the responsibility of constructing both buildings, which were severely damaged by earthquakes in 2015. They were brought down fully to reconstruct new buildings.

Construction of the building at Thapathali appears to be moving forward smoothly with contractor BILIL-CONTECH currently working on the foundation of the building. While the foundation has been laid on some parts of the under-construction building, works are under way in others.

According to the central bank, more than 100 workers have been working on the project. The building is supposed to be completed in 30 months from the date of signing the contract of the Rs1.87 billion project.

But the NRA has yet to decide on another building at Baluwatar nearly five months after the financial proposal of the bidders was opened. This has created uncertainty as to when the building at Baluwatar—where the central bank’s headquarters is located—will be constructed.  

At the heart of the government’s indecision lies the bid of the SRBC Pappu JV. The contractor is entitled to get the contract of the building for quoting the lowest price of Rs2.06 billion among the 12 bidders selected after technical evaluation.

Read: Pappu Construction has billions in contracts—and little work to show

Pappu Construction, founded by suspended lawmaker Harinarayar Rauniyar, has gained notoriety for its substandard works and abandoning projects halfway while taking as many contracts as possible.

When the NRA was in the evaluation process of the bids, Pappu was in the spotlight for its poor performances in a number of the projects including a bridge at Lalbakaiya River in Rautahat. A boat carrying 29 people had hit the under-construction bridge in August last year. Five people had died.

Amid strong public scrutiny and fear expressed by the NRB officials over whether the SRBC Pappu JV would complete the project in time given its past poor record, the NRA failed to take a decision on awarding the contract to the lowest bidder.

More: Arrest warrant issued against Pappu Construction chairman

The NRA then sought opinion from the Prime Minister’s Office (PMO) in October last year about whether to award the contract to SRBC Pappu JV. But, the PMO is yet to give any opinion to the NRA on the matter.  PMO Secretary Sishir Dhungana told the Post that they were still in discussion on the matter. “We will hold further discussions on legal provisions on how we can move ahead regarding the project,” he said.

Due to indecision on part of the PMO, the NRA has been extending the deadline of the bid’s validity.

“Validity of the bids was extended by 45 days a few days ago,” said Manohar Ghimire, joint spokesperson at NRA.  This has kept SRBC Pappu JV still in race to get the contract.

After the Public Procurement Monitoring Office (PPMO) initiated the process of blacklisting the Coastal-Pappu JV in November last year, barring government agencies to award any new contracts to Pappu until its study on whether to blacklist it over poor performance in Dunduwa Irrigation System—of Sikta Irrigation Project—concludes. The Sikta Irrigation Project has already terminated the contract with Coastal-Pappu JV.

Also read: Pappu delay disrupts local life and trade

But in the first week of December last year, the Nepalgunj bench of Tulsipur High Court ordered the government to not blacklist the contractor.

Blacklisting could have paved the way for the NRA to hand over the project to any other contractor. The court order, however, made it difficult for the NRA to hand over the project to any other bidder.

Given the contractor’s poor track record, the Central bank officials are not convinced that the SRBC Pappu JV would complete the work on time if it is awarded the contract. But they are also worried about delay in decision making.

NRB Deputy Governor Chintamani Siwakoti said they are facing difficulty in accommodating all the staff in limited space of the existing buildings. “Two of our departments have been shifted to a building of Cooperative Board at Hariharbhawan, Lalitpur,” he said.

Published: 10-02-2019 07:52

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