District Court Stays Blacklisting of Pappu Construction

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District Court Stays Blacklisting of Pappu Construction
This photo taken from Pappu Construction's Facebook page shows construction of Tinkune bridge in Kathmandu.

December 3: Kathmandu District Court has issued an interim order to stop the process of blacklisting Pappu Construction Company.

The court issued such order after the Kathmandu Valley Road Expansion Project proceeded with blacklisting the construction company after breaking the contract of constructing a bridge at Tinkune, Kathmandu.

The construction company sought the court’s intervention after the project recommended the Public Procurement Monitoring Office (PPMO) to blacklist it. Pappu Construction filed a case in the court demanding a stay order against the move initiated by the Department of Roads (DoR), the road expansion project and concerned financial institutions funding the project.

Responding to the petition, the court issued an interim order not to confiscate the construction company’s bank collateral.

The court also asked all the defendants to submit their evidences within 15 days to the court.

The DoR had issued a notice of cancelling the contract on November 20.

Meanwhile, the company made a counter-claim stating that it had registered the cancelation of the contract on November 19 before the DoR issued the notice.

The company’s Project Manager Ranjan Thakur said that it had cancelled the contract according to section 58.2 (b) and (d) of the contract agreement.

According to Rule 123 (3) of the Public Procurement Regulation, the construction company is allowed to break the contract if the project does not provide a working site within three days. There is also a provision to break the contract by the company if the payment is not made within 84 days after submitting the bills.

“We broke the one-sided contract because the project has withheld Rs 7.49 million since two and half years even after we submitted the bills,” said Thakur.

The project chief Arjun Aryal said that they recommended scrapping the contract and putting Pappu Construction in the blacklist as the company did not work as per the agreement. Aryal said the company was also too late to complete its assigned task.

A company can be blacklisted upon recommendation of the PPMO. Prior to this, the bank can freeze the company’s fund.

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