Postal Highway contract for Ratuwa–Kesaliya section terminated

KATHMANDU: The contract for constructing the 6-kilometre Ratuwa–Kesaliya section of the Hulaki (Postal) Highway in Morang has been terminated.

According to a public notice issued on Tuesday, the Itahari-based Project Office under the Postal Highway Directorate cancelled its agreement with Shrestha Construction Company Pvt. Ltd., Hetauda, citing poor performance and failure to comply with contractual obligations.

The company had signed an agreement on 9 Nov, 2019 to upgrade the road within three years at a cost of Rs 839.9 million, including tax.

The deadline for completion was Nov 9, 2022, but progress has reached only about 25 percent. The contract involved upgrading the road to four lanes in some sections and six lanes in others.

Although the deadline was extended twice, the latest extension expired in Jestha.

Project chief Yuvraj Pokharel said the contract was terminated after repeated directives were ignored, commitments were not honoured, and the construction site remained idle.

The office has already written to the concerned bank to seize Rs 41.9 million submitted as performance guarantee and Rs 96.7 million provided as advance payment. The advance will be recovered with 10 percent interest.

Earlier, in Shrawan, the project office had sought clarification within 15 days on why the contract should not be terminated.

The contractor’s explanation was deemed unsatisfactory, leading to termination under the Public Procurement Act.

The office stated that the contractor failed to present a credible revised work schedule, resource mobilisation plan, or commitment to complete the remaining work.

Officials have also recommended the company be blacklisted.

The contractor has been asked to appear at the office within 15 days for measurement and valuation of the completed and pending works for financial clearance.

If they fail to appear, the office will carry out the assessment on its own.