Nearly 30 percent of government-planned infrastructure projects in Nepal have remained incomplete over the past decade, largely due to ineffective laws and policy inconsistencies, according to the Federation of Contractors’ Associations of Nepal (FCAN).
FCAN reported that the government launched around 100,000 projects worth approximately Rs 1.9 trillion in the last ten years, but nearly 30,000 of them have been left unfinished. Speaking at a program in Kathmandu on Monday, FCAN President Rabi Singh said the lack of coordination among laws governing the construction sector has significantly obstructed project implementation.
Contractors argue that conflicting provisions in the Public Procurement Act and 41 other related laws have created major legal hurdles, delaying infrastructure development. They cite multiple challenges, including delays in contract awards, land acquisition complications, problematic provisions in the Forest Act, difficulties in securing permits from local governments, delayed government payments, awarding contracts without guaranteed funding, and misuse of funds by local consumer committees.
In its 33rd annual report published two years ago, the Commission for the Investigation of Abuse of Authority (CIAA) also highlighted irregularities by consumer committees and neighborhood improvement groups. The anti-corruption body recommended stricter accountability measures when mobilizing funds for local development projects.
Singh further noted that the bureaucratic practice of awarding contracts without allocating sufficient budgets and delays in fund disbursement have disrupted the construction supply chain. As a result, contractors have faced confiscation of bank guarantees, while banks have struggled to recover loans issued to construction firms.
In recent months, the government led by former prime minister Sushila Karki cancelled contracts worth Rs 2 billion. Government data also show that around 250 projects have become “sick,” with some remaining incomplete for as long as 15 years.
Blaming the Public Procurement Act for the growing number of stalled projects, contractors have urged the government to amend existing laws. They have also called for declaring a construction sector emergency and introducing a unified umbrella law to replace the current fragmented legal framework.
