Government Initiates Process to Terminate 50 Additional Non-Performing Contracts

The government has started the process to terminate 50 additional non-performing contracts related to road and bridge construction projects that have remained incomplete for years.

Under the Department of Roads, the Pushpalal (Mid-Hill) Highway Project and the Federal Road Supervision and Monitoring Offices in Kathmandu, Itahari, Janakpur, Pokhara, and Surkhet have initiated steps to cancel these dormant contracts. The authorities processed 17 such terminations on Friday and one more on Saturday.

On Sunday, the Road Division Offices of Janakpur, Kathmandu, Okhaldhunga, Achham, Palpa, Damauli, Dhankuta, Pokhara, the Mid-Hill Road Project, and the Gorkha Road Project published separate public notices asking why these 50 contracts should not be terminated.

The Janakpur Division alone accounts for 21 contracts, followed by Kathmandu with seven; Okhaldhunga and Achham with five each; Palpa and Damauli with four each; and Dhankuta, Pokhara, the Mid-Hill HIghway, and Gorkha road projects with one each.

Minister for Urban Development Kulman Ghising had directed subordinate offices to terminate contracts of contractors who fail to execute projects after winning bids, in an effort to end the trend of leaving development projects stranded. According to the Department of Roads, 258 contracts are currently classified as non-performing projects.

Officials stated that several contractors repeatedly sought deadline extensions but showed no interest in completing the construction work within the given timeframe. Many projects remain incomplete or abandoned, with contractors not even physically present at the sites, violating fundamental contract terms.

Despite repeated written and verbal requests to resume work, contractors have ignored instructions and continued to breach agreements, the Department said.

The notice calls on contractors to appear in person within 15 days of publication with a revised work schedule, a reliable plan for resource mobilization, a commitment to complete the project, or valid justification—supported by evidence—explaining why their contracts should not be terminated.

If contractors fail to demonstrate readiness to resume work within the given period, the government will terminate the contracts under the Public Procurement Act. The contractors will then face blacklisting, confiscation of performance guarantees, advance deposits, and 10 percent interest on advance payments. The government will also recover any additional expenses required to complete the remaining works as public dues. -- RSS